Skip to content
Finance Calc Kit
Investments

Present Value Calculator

Calculate the present value (PV) of a future cash sum or a stream of periodic annuity payments using customizable discount rates.

Report tool

What Is Present Value?

Present value (PV) is the amount you would pay today for a future cash flow, given a required return or discount rate. It reflects the time value of money: a dollar today earns interest, so a dollar promised later is worth less right now.

This calculator handles two common scenarios: discounting a single future sum and discounting a series of equal annuity payments. Lookup tables for the underlying factors are available in our present value factor table (single sums) and present value annuity factor table (payment streams). For uneven payment schedules with repeating line amounts, use the present value of cash flows calculator. For multi-year project cash flows with an initial outlay, see the net present value calculator.

Formulas Used

Single future sum

PV=FV(1+r)n\mathrm{PV} = \frac{\mathrm{FV}}{(1 + r)^n}

With compounding m times per year, the periodic rate is r/mr/m and total periods are n=t×mn = t \times m.

Annuity payments

PV=PMT×1−(1+r)−nr\mathrm{PV} = \mathrm{PMT} \times \frac{1 - (1 + r)^{-n}}{r}

For an annuity due (payments at period start), multiply by (1+r)(1 + r).

Worked Examples

Single sum: What is the PV of $10,000 received in 10 years at 6% compounded annually?

PV=10,000(1.06)10=10,0001.790848=$5,583.95\mathrm{PV} = \frac{10{,}000}{(1.06)^{10}} = \frac{10{,}000}{1.790848} = \$5{,}583.95

Annuity: What is the PV of $1,000 per year for 10 years at 5% (ordinary annuity)?

PV=1,000×1−(1.05)−100.05=1,000×7.721735=$7,721.74\mathrm{PV} = 1{,}000 \times \frac{1 - (1.05)^{-10}}{0.05} = 1{,}000 \times 7.721735 = \$7{,}721.74

Frequently asked questions

What discount rate should I use?
Use your required rate of return, cost of capital, or a risk-adjusted hurdle rate. For bonds, the market yield is common. For personal planning, use an expected investment return or inflation-adjusted rate.
When does compounding frequency matter?
Compounding frequency affects single-sum mode. More frequent compounding increases the effective discount, lowering present value. Annuity mode assumes payments match the selected period unit (annual or monthly).
What is the difference between ordinary annuity and annuity due?
Ordinary annuity discounts payments arriving at period end. Annuity due discounts payments at period start, producing a higher present value because each payment is received one period sooner.
How does present value relate to net present value?
Present value discounts one cash flow or uniform stream. Net present value sums the present values of many cash flows (including an initial investment) to evaluate a project. Use the NPV calculator for irregular multi-period analysis.
Are my inputs saved?
No. All calculations run locally in your browser. Input changes sync to the URL so you can share or bookmark your scenario.

Resources and references

The formulas and methods in this calculator were checked against these independent sources.