Present Value Calculator
Present value is the amount you would need today to reach a given future sum at a stated rate of return. It is used to compare payments that fall at different times.
Enter your figures below. Results update as you type.
Present value$27,919.74
- Discount
- $22,080.26
- Discount factor
- 0.5584
How the Present Value calculation works
PV = FV / (1 + r)^t
A higher discount rate or a longer wait both reduce present value. $50,000 due in ten years is worth about $27,920 today at 6%.
Frequently asked questions
What discount rate should I use?
Use the return you could reasonably earn elsewhere at similar risk. Businesses often use their cost of capital.
How do I calculate present value?
Use PV = FV / (1 + r)^n, where FV is the future amount, r the discount rate per period and n the number of periods. $10,000 received in 5 years, discounted at 6%, is worth $7,472.58 today.
How do I calculate present value in Excel?
Use =PV(rate, periods, payment, future value). For $10,000 in 5 years at 6%, enter =PV(0.06, 5, 0, -10000), which returns $7,472.58.
What is the difference between present value and net present value?
Present value is what a future amount is worth today. Net present value adds up the present value of every cash flow from a project and subtracts the initial cost. A positive NPV means the project earns more than the discount rate.
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