Present Value Calculator
$0.00 present value
What Present Value Actually Tells You
Present value answers a simple question: how much would a future sum of money be worth if you had it in your hands today, given a certain discount rate? Because money available now can be invested to earn a return, a dollar received in the future is worth less than a dollar received today. This calculator discounts a single future amount back to today's dollars using PV = FV / (1 + r)^n, where r is the periodic discount rate and n is the number of compounding periods.
Adding a Recurring Payment Stream
If you also expect to receive (or need to set aside) a fixed payment every period on top of the lump sum — for example, a series of equal withdrawals or contributions — this calculator treats that stream as an ordinary annuity and discounts it separately using the standard annuity present value formula, then adds it to the lump-sum result. If you don't have a recurring payment, simply leave that field at zero and the tool behaves as a pure single-sum present value calculator.
Choosing a Discount Rate
The discount rate you choose should reflect the return you could reasonably earn elsewhere on money of similar risk — often called the opportunity cost of capital. A common assumption is to use an expected investment return or your cost of borrowing; comparing options at different rates can meaningfully change which choice looks better. If you're working the problem in reverse — figuring out what a lump sum today will grow into — try the future value calculator. For evaluating a stream of equal payments on its own, such as retirement withdrawals or structured settlements, the annuity calculator goes into more detail.
Frequently Asked Questions
What discount rate should I use in a present value calculation?
Use a rate that reflects the return you could reasonably earn on money of similar risk elsewhere, often called the opportunity cost of capital. Many people use an expected investment return (like 6-8% for stocks) or their cost of borrowing. A higher discount rate produces a lower present value, since it assumes money today is worth relatively more.
How is present value different from future value?
Present value discounts a future amount back to what it's worth today, while future value grows a present amount forward to what it will be worth later. They use the same underlying compounding relationship, just solved in opposite directions -- if you know the amount you'll receive later and want today's equivalent, use present value; if you know what you have today and want to project growth, use the future value calculator instead.