Investment
Present Value Calculator
Discount a known future amount to its value today.
Results
Enter values and press Calculate to see an explanation.
Result interpretation
Present value answers what a future payment is worth today. The discount amount is the gap between future and present value, not a fee paid.
Read the learning guide →FORMULA
Formula
Present value is one future amount divided by its compound discount factor.
Formula variables
PV is value today; FV is one future payment; r is the nominal annual discount rate; m is compounding periods per year; t is years. There are m × t periods at r ÷ m per period.
When to use it
Use it to compare a single future payment with money today, such as a maturity payment or savings target. For multiple inflows and outflows, discount each period and use NPV.
WORKED EXAMPLE
Example
- Enter future value 121,000, a 10% annual discount rate, two years, and annual compounding.
- The discount factor is (1 + 10%)² = 1.21; divide 121,000 by 1.21.
- Present value is 100,000 and the discount amount is 21,000 at the chosen rate.
Frequently asked questions
Why is future money usually worth less today?
Money available now can be invested or used elsewhere; the discount rate represents waiting and opportunity cost.
How should I choose a discount rate?
Choose it for the decision, opportunity cost, and risk. The result depends on that assumption; no one rate fits every case.
Can this page value several dated cash flows?
This tool discounts one future amount. Use NPV for a series of cash flows at different times.