Present Value Calculator
Calculate what future money is worth today. Free present value calculator discounting a future amount at your chosen rate over any period.
About the Present Value Calculator
Present value answers a fundamental question of finance: what is money you will receive in the future worth today? This free present value calculator discounts a future amount back to the present at your chosen rate, showing how much you would need to invest now to reach that future sum.
The formula is PV = FV ÷ (1 + r)ⁿ. Because money can earn a return, a rupee or dollar tomorrow is worth less than one today — the discount rate captures that opportunity cost. The higher the rate or the further away the cash flow, the smaller its present value.
Investors comparing a lump sum against instalments, people valuing a future payout and students learning the time value of money all use present value. Everything computes in your browser with no signup.
How to Use the Present Value Calculator
- 1Enter the future amount you expect to receive.
- 2Enter the discount rate (your required return or interest rate).
- 3Enter the number of periods until you receive it.
- 4Read the present value — what that future amount is worth today.
Frequently Asked Questions
How do I calculate present value?
Divide the future amount by (1 + r)ⁿ. A payout of 200,000 in 5 years discounted at 8% is worth 200,000 ÷ 1.08⁵ = 136,117 today. That is the amount you would need to invest now at 8% to have 200,000 in 5 years.
Why is future money worth less than money today?
Because money you have now can be invested to earn a return, and because of inflation and risk. Given a choice between 100,000 today and 100,000 in a year, today is better — you could invest it and have more than 100,000 by next year.
How does the discount rate affect present value?
A higher discount rate lowers present value, because it assumes your money could grow faster elsewhere. At 5%, 100,000 in 10 years is worth 61,391 today; at 12% it is only 32,197. Choosing the rate is the most important judgement in the calculation.
What is the difference between present value and net present value?
Present value discounts a single future amount (or stream) to today. Net present value does the same for a project's cash flows and then subtracts the initial investment, giving a single figure for whether the project adds value.