Present Value Calculator
Enter a future amount, a discount rate and the years to see what it is worth today.
What this tool does
Present value is what a future amount is worth today: PV = FV ÷ (1 + r/n)^(n × years). For example, 10,000 received in 5 years at a 6% discount rate is worth 7,472.58 today. Enter a future amount, rate and time above to see its present value.
Divides a future amount by the compound growth factor to get its value today.
Shows the discount factor and the amount lost to waiting.
How to use it
- Enter the future value.
- Enter the discount rate and the years until you receive it.
- Choose the compounding.
- Read the present value and the discount.
Why use this calculator
Discounts a future amount back to today's value at the rate you choose, and shows the discount factor and the value lost to waiting. A payment later is worth less than the same payment now, because money now can earn a return. Present value puts future amounts on today's footing, which is how payments, settlements and projects are compared.
Why we built it
We built the present value calculator to discount a future amount to today and show the discount factor and the value lost to waiting. For a series of payments use the NPV calculator, and to grow a sum forward use the future value calculator.
If your task goes further, try the Car Lease Calculator.
For a neighbouring job there is also the Annuity Calculator.
Who this tool is for
- People valuing a future payment or settlement
- Students learning discounting
- Investors checking a promised return
When to use it
- Comparing a lump sum now with money later.
- Valuing a future payment or settlement.
- Studying discounting in finance.
- Checking a single cash flow before an NPV analysis.
How it works
PV = FV ÷ (1 + r/n)^(n×t). The factor 1 ÷ (1 + r/n)^(n×t) is the discount factor. The higher the discount rate or the longer the wait, the smaller the present value.
Example: 10,000 in 5 years at 6%, compounded yearly: 10,000 ÷ 1.06^5 = 10,000 ÷ 1.3382 = 7,472.58.
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) |
| Future value | 10000 |
| Annual discount rate | 6 |
| Years until you receive it | 5 |
| Compounded | Yearly |
With those inputs, the calculator returns:
- Present value: $7,472.58
- Discount (value lost to waiting): $2,527.42
- Discount factor: 0.74726
What you give it, and what you get back
| Item | Details |
|---|---|
| Future value | The amount to be received later. |
| Discount rate and years | Annual rate in percent and the time in years. |
| Compounding | Yearly, half-yearly, quarterly or monthly. |
| Output | Present value, the discount and the discount factor. |
Issues you may run into
| What you see | Why it happens | What to do |
|---|---|---|
| What discount rate should I use? | It is a judgement - often an expected return or a borrowing rate. | Try several rates to see how sensitive the result is. |
| I have several payments | This values one amount. | Use the NPV calculator for a series. |
| The value looks too low | A high rate or a long time shrinks it quickly. | Check the rate and years. |
Assumptions and limitations
- A single future amount with a constant rate.
- No inflation, tax or risk adjustment beyond the rate you choose.
Frequently asked questions
What is present value?
The worth today of an amount to be received in the future, discounted at a rate of return.
How do I calculate present value?
Divide the future amount by (1 + r/n)^(n × years).
What discount rate should I use?
The return you could earn elsewhere or the rate you would pay to borrow. It is a judgement.
What is the difference between PV and NPV?
PV values one amount; NPV adds the present values of a series of cash flows and subtracts the initial cost.
Why is present value lower than future value?
Because money received later could not have been invested in the meantime.
Is my information sent anywhere?
No. The calculation runs in your browser and your figures never leave the page.
Sources and accuracy
Present value applies PV = FV divided by (1 + r) to the power of n, the standard time value of money relationship used in finance and in lender disclosures.
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.