Present Value Calculator
Find out what a future sum of money is worth right now by applying an annual discount rate over time. Used in investment appraisal, bond pricing, loan analysis and any decision involving future cash flows.
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Compounding
What the future amount is worth in today's money
- 1
Periodic rate
0.05 ÷ 1 = 0.05 - 2
Total periods
1 × 10 = 10 - 3
Compound divisor
(1 + 0.05)^(10) = 1.628895 - 4
Present value
10,000 ÷ 1.628895 = 6,139.13
How does this calculator work?
PV = FV ÷ (1 + r/n)^(n·t). A $10,000 payment in 10 years discounted at 5% per year (yearly compounding) is worth about $6,139 today. Enter future value, annual discount rate, time horizon and compounding frequency to find today's equivalent value and the PV factor.
Formula
How this is calculated
Present value (PV) is the current worth of a future sum of money, given a specified discount rate. The underlying principle is the time value of money: a dollar today is worth more than a dollar tomorrow because today's dollar can be invested and grow. The discount rate represents either the opportunity cost of capital (what you could earn elsewhere) or a required rate of return that reflects investment risk.
The formula PV = FV ÷ (1 + r/n)^(n·t) inverts compound growth, where FV is the future value, r is the annual discount rate as a decimal, n is the number of compounding periods per year, and t is the time in years. Yearly compounding (n = 1) is the standard for simple DCF work; monthly (n = 12) or quarterly (n = 4) compounding gives a slightly lower PV for the same rate; continuous compounding PV = FV × e^(−r·t) represents the mathematical limit.
Two derived figures are also shown: the PV factor (between 0 and 1), which is the multiplier applied to FV to reach PV, and the effective total discount, the percentage by which the future value is reduced. This calculator handles single lump-sum cash flows only — for a stream of payments use an NPV or annuity calculator. Results assume a constant discount rate throughout the period and do not account for taxes or inflation separately.
Frequently asked questions
PV tells you the equivalent amount of money today that is worth the same as a specified sum received at a future date, given a discount rate. If the PV of a future payment exceeds its cost today, the deal creates value; if it falls short, it destroys value.
Use the risk-free rate (e.g. a government bond yield) for nearly certain cash flows, your weighted average cost of capital (WACC) for business investment, or a personal required return rate for individual investment decisions. A higher discount rate means future money is worth less today.
Present value discounts a single future cash flow to today. Net present value (NPV) sums the present values of all future inflows and outflows of a project, then subtracts the initial investment cost. Positive NPV means the project earns above the discount rate and creates value.
Also known as
TG we-Calculate Editorial Team. (2026). Present Value Calculator [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/present-value-calculator
TG we-Calculate Editorial Team. "Present Value Calculator." TG we-Calculate. 2026. https://we-calculate.com/calculator/present-value-calculator.
TG we-Calculate Editorial Team, "Present Value Calculator," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/present-value-calculator
@misc{wecalculate_present_value_calculator, title = {Present Value Calculator}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/present-value-calculator}}, year = {2026}, note = {TG we-Calculate} }
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