⏪ Present Value Calculator
Calculate present value of future cash flows
How Present Value Calculation Works
Formula
PV = FV / (1 + r/n)^(n×t)
- 1Enter the future value (the amount you'll receive in the future).
- 2Enter the discount rate (annual interest or required return rate).
- 3Enter the time period until you receive the money.
- 4The calculator divides the future value by the compounding factor.
- 5The result shows how much that future money is worth today.
About Present Value Calculator
Calculate the present value of a future sum of money. Discount future cash flows to today's dollars. Essential for investment analysis, NPV calculations, and financial planning.
Frequently Asked Questions
What is present value?
Present value is what a future sum of money is worth today, given a specific return rate. $1,000 received in 5 years at 5% discount rate has a present value of $783.53 — meaning $783.53 invested today at 5% would grow to $1,000.
What discount rate should I use?
Common choices: risk-free rate (Treasury bonds, ~4-5%), expected investment return (7-10% for stocks), or your personal required rate of return. Higher discount rates make future money worth less today.
When is present value used?
PV is used to evaluate investments, price bonds, compare lump sums vs annuities, assess business valuations, and decide between receiving money now vs later.