Present Value Calculator
What is future money worth right now? Discount a future lump sum, or a stream of periodic deposits made at the beginning or end of each period, back to today’s value — with the total interest (discount), step-by-step math and a full accumulation schedule.
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Present Value
$558.39
$1,000.00 received in 10 periods discounted at 6.00%
- Present Value
- $558.39
- Future Value
- $1,000.00
- Total Interest (discount)
- $441.61
- Discount Rate per Period
- 6.00%
- Discount Factor
- 0.55839
- Number of Periods
- 10
The math
- 1Apply the discount factorPV = FV ÷ (1 + r)^N = $1,000.00 ÷ (1 + 6.00%)^10 = $558.39
- 2Total interest (the discount)$1,000.00 − $558.39 = $441.61
Growth of the discounted amount
Present value is the core of the time value of money: a dollar promised later is worth less today because today’s dollar can earn the discount rate in the meantime. Higher rates or longer waits shrink PV — this is exactly how bonds, pensions and lottery payouts are priced.
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Formula
Lump sum: PV = FV ÷ (1+r)^N; Annuity: PV = PMT × [1 − (1+r)^−N] ÷ r (× (1+r) if made at beginning)
Pro tips
- • Match the rate and periods: monthly discounting needs the monthly rate and months, not years.
- • An annuity-due (payments at the beginning) is worth exactly (1+r)× more than an ordinary annuity.
- • Use PV to compare a lump-sum offer against a payment stream — the larger present value wins.
FAQ
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