Present Value Calculator
Calculate the present value of a future amount or payment stream. The cornerstone of all time-value-of-money calculations.
How to use the Present Value Calculator
- Enter your inputs into the Present Value Calculator above.
- Results update instantly as you type — no submit button needed.
- Adjust any value to see how the result changes in real time.
The present value formulas
PV of single amount: PV = FV / (1 + r)^n · · · PV of annuity: PV = PMT × [(1 − (1 + r)^−n) / r]
r is the discount rate per period, n is the number of periods. PV tells you what a future amount is worth in today's dollars at a given required return rate.
Worked example
Receiving $50,000 in 10 years at a 5% required return: PV = 50,000 / (1.05)^10 ≈ $30,696. Receiving $500/month for 20 years at the same rate: PV = 500 × [(1 − 1.00417^−240) / 0.00417] × monthly factor ≈ $75,725.
Frequently asked questions
What discount rate should I use?
Use the rate of return you could earn on a comparable-risk alternative. For risk-free flows, the Treasury yield curve. For risky flows, add a risk premium.
How do PV and NPV differ?
NPV (Net Present Value) sums the PV of all cash flows including the initial investment (a negative number). PV alone usually refers to the PV of one amount or one cash flow stream.
Why does the same dollar shrink over time?
Because dollars today can be invested to grow. The discount factor 1/(1+r)^n captures the opportunity cost of receiving money later instead of now.