Present Value Calculator

Present value (PV) is the current worth of a future sum of money, discounted at a specific interest rate. It answers: "How much is that future payment worth in today's dollars?"

PV discounts a single future cash flow or annuity to the present. Net Present Value (NPV) extends this to a series of cash flows and subtracts the initial investment cost to determine whether a project is profitable.

Future value compounds a present amount forward in time (growing it). Present value discounts a future amount backward to today (shrinking it). They are inverse operations using the same interest rate and time inputs.

For risk-free cash flows, use the current US Treasury yield (≈4–5%). For business projects, use your WACC (typically 8–12%). For personal investment comparisons, use your expected portfolio return (7–10% for broad equities).

More frequent compounding increases the effective rate, which lowers the present value. Daily compounding at 6% produces a slightly lower PV than annual compounding at the same nominal rate because the effective rate is slightly higher.

Use annuity PV when valuing a series of equal periodic payments: mortgage payments, pension income, lease payments, structured settlements, or bond coupon streams. The PMT field in this calculator activates annuity mode automatically.

The discount factor is 1 ÷ (1 + r/n)^(n×t). Multiply any future value by this number to get its present value. It ranges from 0 to 1 — closer to 0 means the cash flow is heavily discounted by time or rate.

A bond's fair price is the present value of all future coupon payments plus the face value, each discounted at the required yield. When yields rise, bond prices fall — because discounting at a higher rate reduces the PV of fixed future cash flows.