Present Value Calculator

Discount a future lump sum back to what it's worth today.

$50,000.00 in 10 years, discounted at 6%, is worth $27,481.64 today.

Present Value

$27,481.64

Future Value

$50,000.00

Growth Needed

$22,518.36

Balance

Estimates only, not financial, tax, or legal advice. See our Terms and Privacy Policy.

Present value answers a simple question: what is a future amount of money worth today? A dollar received in 10 years is worth less than a dollar in hand right now, since money in hand can be invested and grow. Present value is the math that puts a number on exactly how much less.

This is the foundational time-value-of-money calculation behind bond pricing, retirement planning, lump-sum settlement comparisons, and any decision that compares money at different points in time.

How does this calculator work?

Enter the future amount you'll receive or need, the discount rate (your expected rate of return, or the rate the future amount should be evaluated at), the number of years, and how often the rate compounds.

The calculator discounts the future value back to today using the standard time-value-of-money formula: PV = FV / (1 + rate)^periods.

Discounting is the reverse of growing money forward, so present value is the mirror of a future value calculation. When the money arrives as a stream rather than a single sum, its worth today is a present value of an annuity, and the discount rate that makes a set of cash flows net to zero is the internal rate of return.

Worked example

You'll receive $50,000 in 10 years. At a 6% annual discount rate, compounded monthly, what is that worth today?

Future value: $50,000
Monthly rate: 0.50%
Periods: 120 months
Present value: $27,481.64

How the numbers work

Discounting $50,000 back 120 months at 0.5% per month gives $27,481.64, meaning if you invested $27,481.64 today at a 6% annual return, it would grow to exactly $50,000 in 10 years.

The higher the discount rate, or the further out the future payment, the smaller the present value. Both represent more time (or a higher required return) for money to grow into that future amount.

Present value is only as good as the discount rate you choose. Using your realistic expected rate of return (not an overly optimistic one) keeps the comparison honest.

Present Value Calculator glossary

Present Value (PV): What a future amount of money is worth today, after discounting for the time value of money.
Discount Rate: The rate used to convert a future amount into today's dollars, typically your expected rate of return or opportunity cost.
Compounding Frequency: How often the discount rate is applied within a year, more frequent compounding produces a slightly lower present value for the same nominal annual rate.

Present Value Calculator FAQs

What discount rate should I use?+

Use your realistic expected rate of return on alternative investments of similar risk, often called your opportunity cost of capital. A higher discount rate produces a lower present value, since it implies money grows faster elsewhere.

How is this different from Future Value?+

They're inverses of the same relationship: Present Value asks what a future amount is worth today, while Future Value asks what today's amount will grow to. Use the Future Value Calculator if you're starting from a known amount today instead.

What if I also have periodic payments, not just a single future amount?+

Use the Present Value of an Annuity Calculator instead, which values a stream of equal periodic payments rather than a single lump sum.