Present Value Calculator
Calculate what a future sum of money is actually worth today, given a discount rate and number of years.
How to use the calculator
- Enter the future amount you want to find the present value of.
- Enter how many years from now the amount will be received or paid.
- Choose a discount rate — often an expected return, inflation rate, or borrowing rate, depending on what you're comparing against.
How is it calculated?
Worked example: 100,000 received in 10 years is worth 100,000 ÷ 1.05¹⁰ = 61,391 today at a 5 % discount rate. This is the compound interest calculation run backwards: 61,391 invested at 5 % for ten years grows to exactly 100,000. The discount rate is therefore not a forecast of inflation, but an expression of what you could otherwise have earned on the money in the meantime.
The "time value of money" concept states that a dollar today is worth more than a dollar in ten years, because today's dollar can be invested and grow in the meantime. Present value calculation "discounts" a future amount back to today's value, and is widely used in investment analysis, retirement planning, and valuing future cash flows.
Frequently asked questions
Which discount rate should I use?
It depends on the purpose. For investment comparison, an expected return on an alternative investment is often used; for purchasing power, expected inflation is often used; and for project evaluation, a company's cost of capital is often used.
What's the difference between present value and compound interest?
They're two sides of the same coin. Compound interest calculation moves forward in time (what will a sum today be worth in X years?), while present value moves backward (what is a future sum worth today?). See also our compound interest calculator.
Can the present value be negative?
Not with this formula alone — but in more advanced present value analyses (like the net present value of an investment), an initial cost is subtracted, which can produce a negative result.