Money
Present Value Calculator
Enter a future lump sum, a discount rate, and a number of years. The calculator returns the present value, the discount factor, and the total discount (FV minus PV).
The lump sum you will receive (or owe) in the future. · e.g. 10,000
Annual rate used to discount future dollars to today. · e.g. 5
e.g. 10
What is present value?
Present value is what a future dollar is worth today. Because money can earn a return, $100 received a year from now is worth less than $100 today. The discount rate captures the opportunity cost of waiting.
Educational tool. Not financial or investment advice.
Present value (today)
$6,139.13
Discount factor 0.613913 at 5% over 10 years.
PV = FV / (1 + r)^n. Higher rates and longer horizons shrink the present value more aggressively. A 5% rate over 10 years cuts a future dollar to about 61 cents today.
Examples
$10,000 in 10 years at 5%
PV ≈ $6,139 · discount factor 0.61
$50,000 in 20 years at 7%
PV ≈ $12,917
$1,000 in 30 years at 3%
PV ≈ $412
$25,000 in 5 years at 6%
PV ≈ $18,681
How it works
Present value is the inverse of future value compounding. You divide the future amount by (1 + r)^n to undo the compounding.
Present value · PV = FV / (1 + r)^n
Discount factor · (1 + r)^-n
Total discount · FV − PV
Related money calculators
- Future value calculator for the opposite direction.
- Compound interest calculator for the underlying growth math.
- NPV calculator for the present value of a series of cash flows.
- All money calculators.
Disclaimer. Finance estimate only. The discount rate should reflect your alternative use of money and the risk of the cash flow. Not financial or investment advice.
Frequently asked questions
Present value is what an amount of money in the future is worth today. The idea reflects the time value of money: money you have now can earn a return, so a dollar today is more valuable than a dollar received in the future. The discount rate measures that opportunity cost.
PV = FV / (1 + r)^n, where FV is the future amount, r is the per-period discount rate, and n is the number of periods. The expression (1 + r)^-n is the discount factor; multiply it by the future value to get the present value.
Use the rate that reflects the alternative use of your money. For risk-free comparisons, use the prevailing risk-free rate (Treasury yield). For business projects, use the project's required rate of return or weighted-average cost of capital (WACC). For personal decisions, use the realistic return you would earn elsewhere with similar risk.
Future value asks: if I invest $X today at rate r, how much will I have in n years? Present value asks the reverse: if I will receive $Y in n years and could earn rate r, what is that worth to me today? FV = PV × (1+r)^n; PV = FV / (1+r)^n.
Anywhere a future cash flow needs to be compared to a present cost: bond pricing, capital budgeting (NPV), retirement planning, loan analysis, settlement valuation, and discounted cash flow valuation. It is one of the most fundamental tools in finance.
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