Present Value Calculator

Enter a future value, interest rate, and number of periods to find out what that money is worth in today's dollars. The Present Value Calculator discounts your future sum back to the present using the standard PV formula — giving you the present value and total interest earned. Optionally add periodic deposits (annuity payments) to see the combined present value of a cash flow stream plus a lump sum.

The amount of money you expect to have at a future date.

years

How many years until the future value is received.

%

The annual discount or interest rate used to calculate present value.

How often interest is compounded per year.

The amount deposited or received each period.

How often payments are made per year.

Whether payments occur at the start or end of each period.

Results

Present Value (PV)

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PV of Lump Sum

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PV of Periodic Deposits

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Total Interest / Growth

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Total Future Value

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Present Value Breakdown

Results Table

Frequently Asked Questions

What is present value (PV)?

Present value is the current worth of a future sum of money, discounted at a specific interest rate. Because money today can be invested to earn returns, a dollar today is worth more than a dollar in the future. The present value formula quantifies that difference.

What is the present value formula?

The standard formula is PV = FV / (1 + r/m)^(m×t), where FV is the future value, r is the annual interest rate, m is the number of compounding periods per year, and t is the number of years. For annuities, each payment is discounted individually and the results are summed.

What is the difference between present value and future value?

Future value tells you how much a current investment will grow to over time, while present value works in reverse — it tells you how much a future amount is worth right now. Present value 'discounts' future money; future value 'compounds' current money.

How does compounding frequency affect present value?

More frequent compounding means interest is calculated more often, which increases the effective rate and therefore reduces the present value of a future sum. For example, monthly compounding produces a lower PV than annual compounding at the same nominal rate.

What is an ordinary annuity vs. an annuity due?

An ordinary annuity (end of period) makes payments at the end of each period, such as most loan repayments. An annuity due (beginning of period) makes payments at the start of each period. Annuity due payments have a slightly higher present value because each payment is discounted one fewer period.

What discount rate should I use for present value calculations?

The discount rate depends on context. Common choices include the expected rate of return on an alternative investment, a risk-free rate like a Treasury yield, your cost of capital, or an inflation rate if you want to express future values in today's purchasing power.

Can present value be used to evaluate investments?

Yes — present value is a core concept in finance and investment analysis. If the present value of projected cash flows from an investment exceeds the cost of the investment today, the investment may be worthwhile. This is the basis of net present value (NPV) analysis.

What happens to present value as the interest rate increases?

As the discount rate increases, the present value decreases. A higher rate means future money is discounted more aggressively, so it is worth less in today's terms. Conversely, a lower rate means future money retains more of its value when expressed in present terms.

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