Present Value Calculator

This calculator answers the question: how much is a future amount of money worth in today's dollars?

• Lump Sum: Enter a future dollar amount, a discount rate, and a time horizon. The calculator tells you the present value. Use this for comparing a future payout against a current offer, valuing a bond, or checking the real cost of a loan balloon payment.
• Annuity: Enter a recurring payment amount, interest rate, and number of periods. The calculator finds the lump sum that is equivalent in today's dollars to the entire payment stream. Use this to evaluate pension offers, structured settlements, or lease vs. buy decisions.

The discount rate reflects both the time value of money and the opportunity cost of waiting. Use your expected investment return or cost of capital as the discount rate.

Lump Sum (Single Future Payment):

PV = FV / (1 + r)^n

Where FV = future value, r = annual discount rate (decimal), n = years.

Example: $100,000 in 10 years at 7%. PV = $100,000 / (1.07)^10 = $50,835. That means receiving $100,000 in 10 years is worth about $50,835 today.

Ordinary Annuity (Payments at End of Period):

PV = PMT × [1 - (1 + r)^(-n)] / r

Where PMT = regular payment, r = rate per period, n = number of periods.

For monthly payments at an annual rate, use r = annual rate / 12.

Example: $1,000/month for 12 months at 6% annual rate. r = 0.005. PV = $1,000 × [1 - (1.005)^(-12)] / 0.005 = $11,618.93.

Rule of thumb: At a 7% discount rate, money doubles roughly every 10 years. This means a dollar received 10 years from now is worth about $0.51 today, and a dollar in 20 years is worth about $0.26 today.