Present Value Calculator
Calculate what future money is worth today. Essential for investment decisions, retirement planning, and comparing financial options across time.
Calculate PV of a single future lump sum
The lump sum you expect to receive in the future
Years until you receive the money
Expected annual return rate / opportunity cost
Common Scenarios
$25,841.90
$100,000.00
$74,158.10
| Year | Discount Factor | Future Value | Present Value | Cumulative PV |
|---|---|---|---|---|
| 1 | 0.9346 | $0.00 | $0.00 | $0.00 |
| 2 | 0.8734 | $0.00 | $0.00 | $0.00 |
| 3 | 0.8163 | $0.00 | $0.00 | $0.00 |
| 4 | 0.7629 | $0.00 | $0.00 | $0.00 |
| 5 | 0.7130 | $0.00 | $0.00 | $0.00 |
| 6 | 0.6663 | $0.00 | $0.00 | $0.00 |
| 7 | 0.6227 | $0.00 | $0.00 | $0.00 |
| 8 | 0.5820 | $0.00 | $0.00 | $0.00 |
| 9 | 0.5439 | $0.00 | $0.00 | $0.00 |
| 10 | 0.5083 | $0.00 | $0.00 | $0.00 |
| 11 | 0.4751 | $0.00 | $0.00 | $0.00 |
| 12 | 0.4440 | $0.00 | $0.00 | $0.00 |
| 13 | 0.4150 | $0.00 | $0.00 | $0.00 |
| 14 | 0.3878 | $0.00 | $0.00 | $0.00 |
| 15 | 0.3624 | $0.00 | $0.00 | $0.00 |
| 16 | 0.3387 | $0.00 | $0.00 | $0.00 |
| 17 | 0.3166 | $0.00 | $0.00 | $0.00 |
| 18 | 0.2959 | $0.00 | $0.00 | $0.00 |
| 19 | 0.2765 | $0.00 | $0.00 | $0.00 |
| 20 | 0.2584 | $100,000.00 | $25,841.90 | $25,841.90 |
Understanding Present Value
What is Present Value?
Present value answers the question: "What is future money worth today?" Due to the time value of money, a dollar today is worth more than a dollar tomorrow because you can invest that dollar and earn returns.
The discount rate represents your opportunity cost - the return you could earn if you had the money today instead of waiting.
Common Use Cases
- Investment Valuation: "What should I pay for this investment today?"
- Retirement Planning: "How much do I need now to fund future expenses?"
- Business Decisions: "Take $100K now or $150K in 5 years?"
- Bond Pricing: "Fair price for this stream of coupon payments?"
Formulas
Present Value of Lump Sum
PV = FV / (1 + r)^n
Where: FV = Future Value, r = rate per period, n = number of periods
Present Value of Annuity
PV = PMT x [(1 - (1 + r)^-n) / r]
Where: PMT = Payment, r = rate per period, n = number of payments
Example
Question: "What should I pay today for $100,000 I'll receive in 10 years, assuming I could earn 7% annually?"
Answer: PV = $100,000 / (1.07)^10 = $50,835
Paying more than $50,835 today means you'd be better off investing elsewhere at 7%.