Present Value Calculator
Money has a price on time: a dollar you will not see for twenty years is worth less than a dollar in your hand, because the dollar in your hand can earn a return in the meantime. Present value strips that return back out of a future amount, and future value adds it on — the same formula run in opposite directions, which is why both live here behind one mode switch. Add a recurring payment to value a pension, a rent or a bond coupon alongside any lump sum.
- Accurate
- Real-time
- Easy to use
- 100% free
Present value
$112,627.11
Value lost to waiting
$107,373
Details
Updates as you typeA single amount: the future payout when discounting back, or the money you hold today when growing forward. Set it to 0 to value the payments alone.
An optional payment each period — a pension, a rent, a bond coupon. Set it to 0 for a lump sum on its own.
Payments arrive at the end of each period, and the rate compounds at that same frequency.
The nominal annual rate. Zero is allowed and simply means money keeps its face value over time.
Summary
Present value
$112,627.11
Present value
$112,627.11
- Lump sum, discounted$36,86433%
- Payments, discounted$75,76367%
- Total cash flows, undiscounted
- $220,000
- Value lost to waiting
- $107,373
- What $1 at the end is worth now
- $0.3686
- Periods
- 240
- Rate per period
- 0.4167%
- Payments are treated as an ordinary annuity: one arrives at the end of every period, never at the start.
- The rate is assumed constant for the whole horizon, and tax, fees and inflation are ignored.
How this is calculated
- Lump sum
- $100,000
- Payment per period
- $500.00
- Annual rate
- 5.00%
- Periods per year
- 12
- Periods in total (n)
- 240
- Discount factor (1 + i)^-n
- 0.368645
- Annuity factor (1 - (1 + i)^-n) / i
- 151.525313
- Lump sum, discounted
- $36,864.45
- Payments, discounted
- $75,762.66
- Present value
- $112,627.11
Years
Compare scenarios
See how one change moves the result
- CurrentYour inputs as they stand$112,627.11Current
- Lump sum$ 125,000$121,843.22
- Recurring payment$/period 650$135,355.91
- Discount or growth rate% 6.25$97,149.74
For informational purposes only. This is not financial advice — confirm major decisions with a licensed advisor.
Frequently asked questions
What is present value?
Present value is what a future amount of money is worth right now, given a rate of return you could otherwise earn. Discounting $100,000 twenty years out at 5% compounded monthly gives about $36,864 today, because $36,864 invested at 5% would itself grow into $100,000 over those twenty years.
How is present value different from future value?
They are the same equation solved for different unknowns. Future value multiplies by the growth factor (1 + i)^n; present value divides by it. Switching the mode here does exactly that, so discounting an amount and then growing the answer back returns you to where you started.
What is a $500 a month pension worth today?
Value it as an annuity rather than as a lump sum. At a 5% discount rate over 20 years the annuity factor is 151.53, so $500 a month is worth about $75,763 today. The stream pays out $120,000 in total, and the gap between the two numbers is everything you forgo by receiving it slowly.
What discount rate should I use?
Use the return you would realistically earn on the money instead — a safe government bond yield for a near-certain payment, or your own cost of capital for a business decision. A higher rate punishes distant money harder, so the choice matters more the longer the horizon. If you only want to strip out rising prices, use an inflation rate.
Why does the calculator accept a rate of 0%?
Because it is a genuine case, not an error. At 0% there is nothing to discount or compound, so a future amount is worth its face value and n payments are worth exactly n payments. The usual annuity formula divides by the rate and would blow up, so that limit is handled separately here.
Are payments assumed at the start or the end of each period?
At the end, which is the ordinary annuity convention used by standard mortgage and pension tables. An annuity due, where payments land at the start of each period, is worth one period more of interest — multiply the result by (1 + i) if that is the arrangement you are valuing.