Present value calculator
How much is money received later worth in today’s terms?
Present value
Present value: US$6,139.13
- Discount (future total − present value)
- US$3,860.87
How it works
Present value reverses compounding: divide a future amount by (1 + r) once for every period. A higher rate or a longer wait means a lower value today.
A stream of payments is discounted one payment at a time and added up. The discount rate is your choice: the return you could earn elsewhere, a loan rate or expected inflation.
Formula
PV = FV ÷ (1 + r)^n + PMT × (1 − (1 + r)^−n) ÷ r × (1 + r) on the payment part for payments at the start At 0%: PV = FV + PMT × n
Worked example
10,000 received in 10 years at a 5% discount rate is worth 10,000 ÷ 1.05¹⁰ = 6,139.13 today. Adding 100 at the end of each year raises the present value to 6,911.31.
Questions people ask
What discount rate should I use?
The return you give up by waiting, such as a savings rate or an investment’s expected return. There is no single correct rate.
Is this the same as net present value (NPV)?
NPV subtracts the upfront cost from the present value of the future cash flows. Take this result and subtract your cost to get NPV for equal payments.