NPV Calculator
Enter an initial investment, a discount rate and the cash flows to get the net present value.
What this tool does
Net present value is the sum of future cash flows discounted to today, minus the initial investment. A positive NPV means the project returns more than the discount rate. For a 1,000 investment returning 500 a year for three years at 10%, NPV is 243.43. Enter your own cash flows above.
Discounts each period's cash flow at your rate and adds them.
Subtracts the initial investment and shows the NPV with a period table.
How to use it
- Enter the discount rate per period.
- Enter the initial investment paid at time 0.
- List the cash flows for periods 1, 2, 3, one per line.
- Read the NPV and the discounted flows.
Why use this calculator
Calculates net present value from an initial investment, a discount rate and a list of cash flows, with a table showing each period's discounted value. A project that pays back more money in total can still be a bad deal if the money comes too late. NPV accounts for the time value of money so projects with different timing can be compared on one number.
Why we built it
We built the NPV calculator to show each period's discounted cash flow in a table, so you can see where the value comes from. Cross-check with the IRR calculator, and value a single amount with the present value calculator.
Handy alongside this: the Percent Error Calculator.
Who this tool is for
- Business owners judging a purchase or project
- Analysts discounting forecast cash flows
- Finance students
When to use it
- Appraising a business investment or equipment purchase.
- Comparing projects with different timing.
- Checking a rental or property cash-flow plan.
- Finance coursework.
How it works
NPV = −initial + Σ cash flow(t) ÷ (1 + r)^t for t = 1, 2, 3…. Positive values are cash received and negative values are payments. If the NPV is above zero the project earns more than the discount rate; below zero, less.
Example: 1,000 invested, then 500 at the end of years 1, 2 and 3, discounted at 10%: 454.55 + 413.22 + 375.66 = 1,243.43, minus 1,000 is a net present value of 243.43.
This is a general-purpose calculation using the figures you enter, with constant assumptions. It is not financial, tax or investment advice, and real results will differ.
A worked example
These are the values the calculator opens with, so you can see exactly what it does with them. Change any value on the page and the result updates; the figures below come from the same calculation.
| Input | Value |
|---|---|
| Currency symbol | $ (dollar) |
| Discount rate per period | 10 |
| Initial investment | 1000 |
| Cash flows for periods 1, 2, 3… | 500 / 500 / 500 |
With those inputs, the calculator returns:
- Net present value: $243.43
- Present value of the cash flows: $1,243.43
- Initial investment: $1,000.00
- Reading: Positive: returns more than the discount rate
What you give it, and what you get back
| Item | Details |
|---|---|
| Discount rate | Per period, in percent. |
| Initial investment | The amount paid at time 0. |
| Cash flows | One number per line for periods 1, 2, 3…; negative for payments. |
| Output | NPV, total present value and a discounted cash flow table. |
Issues you may run into
| What you see | Why it happens | What to do |
|---|---|---|
| NPV is negative but the project makes money | It earns less than the discount rate. | Check the rate and the timing of cash flows. |
| Periods do not match the rate | The rate must match the period length (yearly rate for yearly flows). | Convert the rate to the period. |
| A line shows as invalid | Text or a symbol was entered. | Use plain numbers; negatives with a minus sign. |
Assumptions and limitations
- A constant discount rate for all periods.
- Cash flows are assumed at the end of each period.
- Forecast accuracy decides the result.
Frequently asked questions
What is NPV?
The value today of all future cash flows from a project, minus its initial cost, using a discount rate.
What does a positive NPV mean?
The project is expected to return more than the discount rate, so it adds value.
What discount rate should I use?
Your required return or cost of capital. It is a judgement.
What is the difference between NPV and IRR?
NPV gives an amount at a given rate; IRR is the rate at which NPV is zero.
Can cash flows be negative?
Yes. Enter payments as negative numbers.
Is my information sent anywhere?
No. The calculation runs in your browser and your figures never leave the page.
Sources and accuracy
Net present value discounts each cash flow by (1 + r) to the power of its period number and subtracts the initial investment, the standard discounted cash flow formula used in finance.
Figures last checked against the source on . Standards and rates can change — if you are relying on this for something that matters, confirm against the source above. Think a figure is wrong or out of date? Send a correction.