Present value calculator
Enter a future amount, a regular payment or both, the yearly discount rate and the number of years. Choose compounding, payment frequency and timing to get what they are worth today.
Runs in your browser: nothing you enter is sent anywhere.
How to use it
- Enter the future lump sum, the regular payment, or both (use 0 for what you do not have).
- Enter the yearly discount rate and the number of years.
- Choose compounding, payment frequency and whether payments fall at the start or end of each period.
- Read the present value and how much of it comes from the lump sum and from the payments.
How it works
The lump sum is divided by (1 + r ÷ m)^(m × years). The payments are valued as an annuity with i = (1 + r ÷ m)^(m ÷ p) − 1 per payment period and N = years × p payments, PMT × (1 − (1 + i)^−N) ÷ i, multiplied by 1 + i for payments at the start of a period. With a 0% rate the payments are just PMT × N.
Worked example
10,000 received in 10 years at a 5% discount rate, compounded annually, is worth 6,139.13 today. Receiving 100 at the end of each year for 10 years is worth 772.17 today; if each payment comes at the start of the year, 810.78. The default 50,000 in 10 years is worth 30,695.66, so 19,304.34 is lost to discounting.
Tips
- The further away the money and the higher the rate, the smaller its present value.
- To grow a sum forward instead, use the future value calculator.
These are estimates to help you compare options, not financial advice.
Frequently asked questions
What is present value?
It is what money you will receive later is worth today, given a rate you could earn instead. 10,000 in 10 years at 5% is worth 6,139.13 now, because 6,139.13 invested at 5% grows to 10,000.
What is the formula?
For a lump sum, PV = FV ÷ (1 + r ÷ m)^(m × years). For equal payments, PV = PMT × (1 − (1 + i)^−N) ÷ i, with i the rate for one payment period and N the number of payments. Payments at the start of a period are multiplied by 1 + i.
Which discount rate should I use?
The return you could earn on a similar alternative, or an interest rate on debt you would pay off instead. A higher rate lowers the present value. The tool does not suggest one.
How do I value a stream and a lump sum together?
Fill in both. The result is their sum, with each part shown separately, which fits cases like a bond-style cash flow with a final repayment.
What if the rate is 0%?
Nothing is discounted, so the present value is the lump sum plus all the payments added up.