Money in the future is worth less than money today because today’s money can earn interest. Present value lets you compare a lump sum now with payments later, value bonds and decide between offers.
How to use the Present Value Calculator
- Future value
- Periodic payment
- Discount rate per period
- Number of periods
- Payment timing
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the future amount, any regular payment, the discount rate per period and the number of periods.
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
| Field | What to enter |
|---|---|
| Future value | Amount in your currency |
| Periodic payment | Amount in your currency |
| Discount rate per period | In % |
| Number of periods | A number |
| Payment timing | Choose one: End of each period, Beginning of each period |
What each result means
- Present value = pvann([Discount rate per period]÷100, [Number of periods], [Periodic payment], [Payment timing], [Future value])
- Discount (time value) = [Future value] + [Periodic payment]×[Number of periods] – [Present value]
- Discount factor = 1÷(1 + [Discount rate per period]÷100)^[Number of periods]
Example values
How the main result changes when Future value changes and everything else stays at the example values above:
| Future value | Present value |
|---|---|
| 12,500 | 6,979.93 |
| 18,750 | 10,469.9 |
| 25,000 | 13,959.87 |
| 31,250 | 17,449.84 |
| 37,500 | 20,939.8 |
| 50,000 | 27,919.74 |
Formula
PV = FV ÷ (1 + r)^n + PMT × [1 − (1 + r)^−n] ÷ r × (1 + r × timing)Worked example
Inputs — Future value: $25,000; Periodic payment: $0; Discount rate per period: 6 %; Number of periods: 10; Payment timing: End of each period.
Results — Present value = $13,959.87; Discount (time value) = $11,040.13; Discount factor = 0.55839.
Frequently asked questions
What is present value?
The value today of money received in the future.
How do I calculate it?
PV = FV ÷ (1 + r)^n for a single amount.
Why does a higher rate give a lower PV?
Future money is discounted more heavily.
What formula does the Present Value Calculator use?
PV = FV ÷ (1 + r)^n + PMT × [1 − (1 + r)^−n] ÷ r × (1 + r × timing).