Present Value Calculator

How to Use This Calculator

1. Enter the Future Value — the amount you expect to receive in the future.
2. Enter the Discount Rate — your required rate of return or opportunity cost.
3. Enter the Number of Periods — years until you receive the future value.
4. See the Present Value — what that future amount is worth in today's dollars.
5. Use the Annuity tab for recurring payments, or Professional for full NPV analysis.

Formula

Example

Frequently Asked Questions

• What is present value? ▼
  Present value (PV) is the current worth of a future sum of money, discounted at a given rate of return. The concept is that money available today is worth more than the same amount in the future because of its potential earning capacity — this is the time value of money.
• What discount rate should I use? ▼
  The discount rate depends on context: for investments, use your required rate of return (often 7–10% for stock investments); for corporate projects, use the company's WACC; for personal finance decisions, use your opportunity cost — what you could earn with alternative investments.
• What is the difference between PV and NPV? ▼
  Present Value (PV) discounts a single future amount. Net Present Value (NPV) sums the PV of multiple future cash flows and subtracts the initial investment. NPV > 0 means the investment creates value; NPV < 0 means it destroys value.
• What is a perpetuity? ▼
  A perpetuity is a stream of equal payments that continues forever. Its present value is: PV = Payment / Discount Rate. For example, a $1,000/year perpetuity discounted at 5% = $1,000 / 0.05 = $20,000. Government bonds and preferred stocks sometimes resemble perpetuities.
• What is the Fisher equation for real vs nominal rates? ▼
  The Fisher equation relates nominal rates, real rates, and inflation: (1 + nominal) = (1 + real) × (1 + inflation). Rearranging: real rate = (1 + nominal) / (1 + inflation) − 1. For example, 8% nominal with 2.5% inflation gives a real rate of about 5.37%.

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