Present Value Calculator
Find out what money you will receive in the future is worth today. Discount a single future amount, a series of equal payments (an annuity) or both, with your choice of compounding and payment timing.
Paid every period, e.g. each month.
How to use the Present Value Calculator
- Choose what to discount: a future amount, a series of payments, or both.
- Enter the amounts: the future value and/or the payment per period.
- Set the discount rate and years, and how often interest compounds.
- For payments, pick the payment frequency and whether they come at the start or end of each period.
- Press Calculate to see the present value, the working and how it changes at other rates.
Present value formulas
- Single amount: PV = FV ÷ (1 + r/m)m·t, or PV = FV × e−r·t with continuous compounding.
- Ordinary annuity (payments at the end of each period): PV = PMT × [1 − (1 + i)−n] ÷ i
- Annuity due (payments at the start): multiply the ordinary annuity PV by (1 + i).
- Rate per payment period when payments and compounding differ: i = (1 + r/m)m/p − 1, with p payments per year.
Example: $10,000 received in 10 years, discounted at 5% compounded annually, is worth 10,000 ÷ 1.0510 = $6,139.13 today.
Discount factor table
Multiply any future amount by the factor to get its present value (annual compounding).
| Years | 3% | 5% | 7% | 10% |
|---|---|---|---|---|
| 1 | 0.9709 | 0.9524 | 0.9346 | 0.9091 |
| 5 | 0.8626 | 0.7835 | 0.7130 | 0.6209 |
| 10 | 0.7441 | 0.6139 | 0.5083 | 0.3855 |
| 20 | 0.5537 | 0.3769 | 0.2584 | 0.1486 |
| 30 | 0.4120 | 0.2314 | 0.1314 | 0.0573 |
Frequently asked questions
What is present value?
Present value (PV) is what a future amount of money is worth today, given a rate of return you could earn in the meantime. Because money today can be invested, a dollar received later is worth less than a dollar now.
What is the present value formula?
For a single amount, PV = FV ÷ (1 + r/m)^(m×t), where r is the annual rate, m the compounding periods per year and t the years. With continuous compounding it is PV = FV × e^(−r×t).
How do you calculate the present value of an annuity?
For equal payments at the end of each period, PV = PMT × [1 − (1 + i)^(−n)] ÷ i, where i is the rate per payment period and n the number of payments. For payments at the start of each period (annuity due), multiply the result by (1 + i).
What discount rate should I use?
Use the return you could reasonably earn elsewhere with similar risk: a savings or bond rate for safe cash flows, or a higher required return for risky ones. Businesses often use their cost of capital.
Why does a higher discount rate lower the present value?
A higher rate means your money could grow faster elsewhere, so you need less today to reach the same future amount. The further away the payment, the stronger this effect.
What is the difference between present value and NPV?
Present value discounts future cash flows to today. Net present value (NPV) subtracts the upfront cost from that present value to show whether an investment adds value.