Finance
Calculate what a future amount of money is worth today based on a discount rate.
Present Value
$55,839Today's Value
The amount you should invest or receive today to equal the future value given the discount rate.
A present value calculator is a financial tool that applies the principle of time value of money: a dollar received today is worth more than a dollar received in the future. Given a future amount, a discount rate (your required rate of return or cost of capital), and a time period, the calculator computes the present value—the amount you should invest or accept today to equal that future value. It can also account for periodic payments, turning it into a comprehensive tool for evaluating investments, loans, and retirement planning.
The calculator uses the present value formula: PV = FV / (1 + r)^n, where FV is the future value, r is the discount rate, and n is the number of years. If periodic payments are included, the calculator computes the present value of an annuity by summing the discounted value of each payment. The discount rate adjusts for payment frequency (annual, semi-annual, quarterly, or monthly), and the total present value is the sum of the PV of the future lump sum plus the PV of any annuity payments.
PV = FV / (1 + r)^n; PV of Annuity = PMT × [(1 − (1 + r)^−n) / r]; Total PV = PV(FV) + PV(Annuity)The first formula discounts a single future sum back to present value using the discount rate and time period. The annuity formula values a series of equal periodic payments. The discount rate is adjusted by payment frequency: monthly rate = annual rate ÷ 12, quarterly = annual ÷ 4, etc. The total present value combines both components to give you today's equivalent value.
| Input | Result | Notes |
|---|---|---|
| Future Value: $100,000 | Discount Rate: 6% | Time: 10 years | No payments | Present Value: $55,839 | Total Discount: $44,161 | Discount Rate: 6% | At a 6% discount rate, $100,000 in 10 years is worth about $55,839 today. The $44,161 difference is the time value of money over a decade. |
| Future Value: $50,000 | Discount Rate: 8% | Time: 5 years | Monthly payments: $200 | Present Value: $34,596 | Total Discount: $15,404 | PV of Payments: $10,803 | A higher discount rate reduces present value faster. With monthly $200 payments, the PV of the annuity adds $10,803 to the total present value. |
| Future Value: $250,000 | Discount Rate: 4% | Time: 15 years | No payments | Present Value: $137,676 | Total Discount: $112,324 | Discount Rate: 4% | A lower discount rate means future money is worth more today. At 4%, the present value of $250,000 in 15 years is $137,676—nearly 55% of the future amount. |
A discount rate is the percentage rate at which you reduce the value of future money to find its present equivalent. It reflects your required return on investment, cost of capital, or inflation expectations. A higher discount rate means future money is worth significantly less today.
Present value allows you to compare cash flows across time on a fair basis. Without it, a $100,000 payment in 10 years looks equal to $100,000 today—but it's not. PV reveals the true worth of future money in today's terms, essential for investment and lending decisions.
This calculator handles regular periodic payments (annuities) like monthly dividends or loan payments. For irregular cash flows, you would need to discount each flow individually and sum them—use a spreadsheet or NPV calculator for that complexity.
If the discount rate is 0%, money has no time value, and the present value equals the future value. This is rare in practice; even with no inflation, you'd typically expect a return on investment, so use a small positive rate (1–3%) if you're unsure.
Inflation erodes purchasing power. If you use a real (inflation-adjusted) discount rate, the present value reflects the purchasing power of future dollars. If you use a nominal rate, it already accounts for inflation, so don't double-count it.
No—present value is always positive if the future value is positive. If you subtract an upfront cost to compute net present value (NPV), then NPV can be negative, signaling a poor investment. This calculator shows only PV, not NPV.