Money
Present Value Calculator
Last updated: June 19, 2026
A present value calculator is a financial tool that determines the current worth of a future cash flow or lump sum, based on a specific discount rate. Operating on the principle of the time value of money, it discounts future cash back to the present day using the formula PV = FV / (1 + r)^n. This calculation helps investors and businesses evaluate the profitability of future returns relative to current capital requirements. It is widely used in capital budgeting, loan analysis, and investment valuation to compare the current value of competing financial options.
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).
Quick Answer
Calculate the current worth of a future sum of money given a specific discount rate and time period.
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.
- IRA calculator for Traditional or Roth IRA growth projections.
- 401(k) calculator for workplace retirement projections with employer match.
- Coast FIRE calculator for the portfolio size that compounds to a target FIRE number.
- 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.
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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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