Present Value Calculator
Use this present value calculator to determine how much a future amount of money is worth in today's dollars. This tool helps you discount a future value back to the present using your chosen rate and time period.
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Results
- Present value
- $11,208.87
- Discount amount
- $3,791.13
Formula
PV = FV / (1 + r/m)^(m·t)
How to calculate
- Take the amount you expect to receive in the future.
- Choose the discount rate.
- Determine how many periods until the future amount is received.
- Divide the future value by the discount factor.
- The result is the amount that future payment is worth today.
Worked example
$15,000 in 5 years discounted at 6%: PV = 15,000 / (1.06)^5 ≈ $11,208.87.
Frequently asked questions
What is present value?
Present value is the current value of a future amount of money after adjusting for time and a discount rate.
Why is future money worth less today?
Because money today can be used, invested, or earn returns before the future date arrives.
What discount rate should I use?
That depends on your expected return, cost of capital, inflation assumptions, or required rate of return.
Can present value be used for investment decisions?
Yes. It is often used to compare future cash flows and evaluate financial opportunities.
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This tool is for educational and planning purposes only.