Present Value Calculator
Calculate the present value of a future lump sum or stream of payments using a discount rate.
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How to use this calculator
FV = future value, r = annual discount rate ÷ 100, n = years.
- 1
Enter the future amount you want to receive or need to reach.
- 2
Enter the annual discount rate (your expected rate of return or cost of capital).
- 3
Enter the number of years until you receive the future amount.
- 4
The result shows what that future sum is worth in today's dollars.
Frequently asked questions
What is present value?
Present value is how much a future sum of money is worth today. Because money can be invested to earn returns, $100 today is worth more than $100 in the future. Present value quantifies exactly how much more.
What discount rate should I use?
Use your expected rate of return for the period, or your cost of capital. For personal investments, 6–10% is typical for a stock market assumption. For business decisions, use the company's WACC (Weighted Average Cost of Capital).
What is the time value of money?
The time value of money is the principle that a dollar today is worth more than a dollar in the future because today's dollar can be invested and grow. It is the foundation of all finance, from loan pricing to investment valuation.
How is present value used in business?
Present value is used to evaluate investments (NPV analysis), price bonds, value companies (DCF valuation), compare project costs, and make lease-vs-buy decisions. Any decision involving cash flows at different points in time requires present value analysis.
Present value and the time value of money
Why money has a time value
A dollar received today can be invested and grow. A dollar received in 10 years cannot grow for those 10 years. At an 8% return, $1 today becomes $2.16 in 10 years. Conversely, $100,000 promised in 10 years is worth only $46,320 today at 8% — because $46,320 invested now would grow to $100,000.
Present value in bond pricing
Bonds pay a series of fixed coupon payments plus a face value at maturity. Their market price equals the present value of all future cash flows, discounted at the current market yield. When yields rise, bond prices fall — because future payments are discounted at a higher rate.
NPV vs PV
Present Value (PV) is the value of a single future cash flow today. Net Present Value (NPV) is the sum of all future cash flows (positive and negative) discounted to today, minus the initial investment. NPV > 0 means the investment creates value; NPV < 0 means it destroys value.
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Results are estimates for informational purposes only and do not constitute professional financial, medical, legal, or technical advice. Read full disclaimer →