Present Value Calculator
What money in the future is worth today, for a single sum or a series of payments.
Good to know. A promise of 1,000 in ten years is worth less than 1,000 today. How much less is the whole question.
Not financial advice. Uses only the numbers and rates you enter — no live data.
How it works
In plain words
Divide the future amount by (1 + rate) once for every period between now and then. For regular payments, add up each payment discounted the same way, which has a shortcut formula.
The formula
PV = FV ÷ (1 + r)ⁿ PV of payments = PMT × (1 − (1 + r)⁻ⁿ) ÷ r
Worked example
10,000 in 10 years at a 5% discount rate is worth 10,000 ÷ 1.05¹⁰ = 6,139.13 today.
Sources
- Brealey, Myers and Allen, Principles of Corporate Finance, chapter 2 The standard formulas for loan payments, compounding and present value, the same as a spreadsheet’s PMT and FV.
Sources checked September 30, 2026. 3 automated tests check its answers on every change.
About the present value calculator
Money in the future is worth less than the same money today, because money you have now can earn interest in the meantime. Present value turns a future amount into its equivalent today, by removing the interest it could have earned. It is compound interest run backwards.
The discount rate is the return you could get elsewhere with similar risk: a savings rate for a safe payment, a higher rate for an uncertain one. The higher the rate and the further away the money, the less it is worth today. At 5%, 10,000 in 10 years is worth about 6,139 today; at 8%, about 4,632.
Use it to compare offers that pay at different times: a lump sum now against payments over years, a pension option, a lottery payout, a legal settlement or an investment that pays back later. Enter regular payments to value a stream of income, such as an annuity or rent. Payments are assumed to arrive at the end of each period.
For months, use a monthly rate: 6% a year is about 0.5% a month. Inflation can be handled the same way: discount at the inflation rate to see a future amount in today’s money, which is what the inflation calculator does.
Questions people ask
How do I calculate present value?
Divide the future amount by (1 + rate) raised to the number of years. 10,000 in 10 years at 5%: 10,000 ÷ 1.6289 = 6,139.13.
What discount rate should I use?
The return you could earn elsewhere at similar risk. For a safe future payment, a savings or government bond rate.
Is a lump sum better than payments over time?
Compare the present value of the payments with the lump sum. If the payments’ present value is higher at a realistic rate, they are worth more.