# NPV Calculator – Net Present Value

URL: https://speedycalculator.com/calculators/finance/npv/
Last updated: 2026-10-25

> The NPV calculator works out the net present value of an investment – the value today of all its future cash flows discounted at your required rate, minus the initial cost – and the present value of each part.

## Inputs

- Discount rate (%)
- Initial investment
- Cash flows for year 1, 2, 3 …

## Results

- Present value of future cash flows
- Net present value (NPV)
- Undiscounted net cash flow
- IRR
- Decision

## Formula

```
NPV = Σ CFₜ ÷ (1 + r)^t − initial investment
Accept if NPV > 0
```

## Explanation

Net present value is the gold standard for investment decisions. A positive NPV means the investment earns more than your required return and adds value; a negative NPV destroys value.

### How to use the NPV Calculator – Net Present Value

- **Discount rate**
- **Initial investment**
- **Cash flows for year 1, 2, 3 …**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the discount rate, the initial investment and the cash flow for each year.

### Tips

- Use the nominal annual rate and pick the compounding frequency your bank or broker states.
- Small differences in return or fees compound into large differences over decades.
- Run the calculation with a cautious, a central and an optimistic return to see the range of outcomes.
- Past returns do not guarantee future returns – nothing here is investment advice.

### Common mistakes to avoid

- Comparing an APR with an APY or effective rate.
- Ignoring inflation, taxes and fees when judging a real return.
- Entering a percentage as a decimal (5 instead of 0.05 is correct here).

### Inputs explained

FieldWhat to enterDiscount rateIn %Initial investmentAmount in your currencyCash flows for year 1, 2, 3 …A list of numbers separated by commas, spaces or new lines

### What each result means

- **Present value of future cash flows** = [Net present value (NPV)]([Discount rate]÷100, [Cash flows for year 1, 2, 3 …])
- **Net present value (NPV)** = [Present value of future cash flows] - [Initial investment]
- **Undiscounted net cash flow** = sum([Cash flows for year 1, 2, 3 …]) - [Initial investment]
- **IRR** = [IRR](0 - [Initial investment], [Cash flows for year 1, 2, 3 …])×100

### Example values

How the main result changes when **Discount rate** changes and everything else stays at the example values above:

Discount rate (%)Net present value (NPV)518,790.037.514,056.46109,803.5412.55,970.33152,504.9520-3,493.44

## Worked example

Inputs — Discount rate: 10 %; Initial investment: $50,000; Cash flows for year 1, 2, 3 …: 12000, 15000, 18000, 20000, 15000.

Results — Present value of future cash flows = $59,803.54; **Net present value (NPV) = $9,803.54**; Undiscounted net cash flow = $30,000.00; IRR = 16.97 %; Decision = Accept – positive NPV.

## FAQ

**What is NPV?**
The present value of future cash flows minus the initial investment.

**What discount rate should I use?**
Your cost of capital or required rate of return.

**What does a positive NPV mean?**
The project earns more than the required return.

**What formula does the NPV Calculator – Net Present Value use?**
NPV = Σ CFₜ ÷ (1 + r)^t − initial investment.


## Sources

- [Corporate Finance Institute – financial ratios](https://corporatefinanceinstitute.com/)