Present Value Calculator
Calculate what a future sum of money is worth today at a given discount rate.
Formula and sources updated · Data sources · 1View algorithm, constants and default inputs (JSON)
About this calculator
Present value answers a simple question: how much would you need to invest today, at this rate, to end up with that future amount? It is the mirror image of future value and the basis of every discounted cash flow model.
Worked example
calculated with the default values below
Future value 20,000 $ · Discount rate 7 % · Number of years 10 years Present value 10,166.99 $ · Discount amount 9,833.01 $
Method and assumptions
Formula basis and scope
PV = future value / (1 + annual percent / 100)^years.
Annual compounding with a constant discount rate; excludes cash flows during the term.
Data sources
Disclaimer
These calculators give estimates for general information only. They are not financial, tax or investment advice and do not take your personal circumstances into account. Before borrowing, investing or filing, confirm the numbers with a qualified adviser in your jurisdiction.
Implementation source
This record describes the implementation used by this page. It is not independent validation. External references, when available, support only the stated formula or definition; estimates and custom rules retain their own assumptions.
Formula and variables
PV = FV ÷ (1 + r ÷ 100)^n; D = FV − PV
- PV
- Present value
- FV
- Future value
- r
- Discount rate (% per year)
- n
- Years
- D
- Discount amount
Annual compounding; the rate is entered as a percentage.
Frequently asked questions
Why does a higher discount rate shrink my present value so sharply?
Present value uses future value divided by (1 + rate)^years, so the rate compounds rather than being subtracted linearly. At the default 7% over 10 years, $20,000 shrinks to about $10,166 today, a discount of nearly $9,834. Doubling the rate to 14% cuts that to roughly $5,368, showing the exponent, not the rate alone, is what drives the drop.