Present Value CalculatorFree online financial calculator — instant results, no sign-up
Today's value of a future sum.
Estimates only, based on the inputs and assumptions shown. This is not financial, investment, tax, or legal advice. Prices, rates and local rules may change; crypto scenarios do not predict returns. Confirm important decisions with a qualified professional.
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About the Present Value Calculator
This calculator determines the present value of a single lump-sum cash amount expected in the future based on a specified annual discount rate. It helps savers, investors, and analysts evaluate what a future sum is worth in today's dollars. The tool also displays the total discount, which is the difference between the future payout and its present worth.
- Future value
- The targeted monetary sum to be received at the end of the term, in dollars.
- Rate
- The expected annual discount rate or rate of return, entered as a percentage (e.g., 6 for 6%).
- Years
- The length of time in years until the future value is received.
Formula and method
PV = FV / (1 + r)^t Discount = FV - PV
- PVPresent value in dollars
- FVFuture value in dollars
- rAnnual discount rate expressed as a decimal (Rate / 100)
- tNumber of years
- DiscountTotal discount amount (reduction from future value to present value)
The tool divides the future sum by (1 + r)^t, where r is the annual rate divided by 100 and t is the number of years. It then computes the discount by subtracting the calculated present value from the future value. Both final figures are rounded to two decimal places for currency display.
Worked example
These are the calculator's starting values and the results it actually produces for them.
Inputs
- Future value10000 $
- Rate6 %
- Years10
Results
- Present value$5,583.95
- Discount$4,416.05
How to use the Present Value Calculator
- 1Divide the annual rate percentage by 100 to convert it into a decimal rate.
- 2Add 1 to the decimal rate and raise the result to the power of the number of years.
- 3Divide the future value by the compound factor from step 2 to get the present value.
- 4Subtract the present value from the future value to find the discount.
Reading your result
The present value shows the amount of capital required today to reach the future goal under the given annual return rate. The discount represents how much of the future balance consists of compounded growth over the investment horizon. A higher discount rate or a longer time frame lowers the present value and increases the discount.
Limitations
The calculation assumes compounding occurs strictly on an annual basis rather than semiannually, monthly, or continuously. It assumes a fixed, unchanging discount rate across the entire duration and does not factor in taxes or inflation. It also models only a single cash flow rather than an ongoing stream of payments.
Common questions
What is the difference between the discount rate and an interest rate?+
In this calculation, they function identically mathematically. When projecting forward from today, the rate represents an interest rate; when discounting a future sum back to today, it is called a discount rate.
Why does a higher discount rate decrease the present value?+
A higher rate means money grows faster over time. Because each dollar invested earns more interest, you need fewer dollars today to reach the same future target.
Does this calculation account for inflation?+
Not directly. If you enter a nominal discount rate, the present value is in nominal terms; if you enter an inflation-adjusted (real) rate, the result reflects purchasing power in real terms.
Does the calculator save my information?+
Calculations run in your browser. While signed in, inputs and results are automatically recorded in account history; saving a result creates a separate saved record.
Further reading
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Results are estimates for informational purposes and are not financial, medical or legal advice.