Present Value Calculator
Find out what a future amount of money is worth today. Enter the future value, an annual discount rate, the number of years and how often it compounds to see the present value and the discount applied.
How to use the present value calculator
- Enter the future amount you expect to receive and the annual discount rate.
- Choose the number of years until you receive it and the compounding frequency.
- Read the present value today and the total discount applied.
Examples
1,628.89 in 10 years at 5%, compounded annually
future value 1628.89, rate 5%, 10 years, annual
Present value 1,000.00 with a 628.89 discount
Frequently asked questions
What is present value?
Present value is what an amount of money to be received in the future is worth today, once you account for the return you could earn in the meantime. A dollar later is worth less than a dollar now because of this time value of money.
What is the present value formula?
PV = FV / (1 + r/n)^(n*t), 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 number of years until the money is received.
How does the present value calculator relate to future value?
It is the inverse. Future value grows money forward at a rate, while present value discounts money back at that same rate. Discounting a future value and then compounding it again returns the original amount.
What is the discount rate?
The discount rate is the annual return you assume you could earn instead, such as a savings rate or a required rate of return. A higher discount rate means future money is worth less today.
Does this include taxes, fees or inflation?
No. The result is a nominal calculation at the rate you enter, before taxes, fees and inflation. Use a real (inflation adjusted) rate if you want a value in today's purchasing power.
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