Calculation Type
Select the type of cash flow to calculate
Calculate the present value of a single future amount.
Future Value
Enter the future amount to discount
Discount Parameters
Set the discount rate and time period
Present vs Future Value Over Time
Visual comparison of values across time
Discount Factor Over Time
Shows how much $1 in the future is worth today at 5% discount rate
Present Value Formulas
Mathematical formulas for each calculation type
Lump Sum
PV = FV / (1 + r)^n
Where FV = Future Value, r = rate, n = periods
Ordinary Annuity
PV = PMT × [(1-(1+r)^-n)/r]
PMT = Payment amount per period
Growing Annuity
PV = PMT × [(1-((1+g)/(1+r))^n)/(r-g)]
g = growth rate per period
Year-by-Year Breakdown
Detailed present value calculations by year
| Year | Future Value | Present Value | Discount Factor |
|---|---|---|---|
| 1 | $100,000 | $95,238 | 95.24% |
| 2 | $100,000 | $90,703 | 90.70% |
| 3 | $100,000 | $86,384 | 86.38% |
| 4 | $100,000 | $82,270 | 82.27% |
| 5 | $100,000 | $78,353 | 78.35% |
| 6 | $100,000 | $74,622 | 74.62% |
| 7 | $100,000 | $71,068 | 71.07% |
| 8 | $100,000 | $67,684 | 67.68% |
| 9 | $100,000 | $64,461 | 64.46% |
| 10 | $100,000 | $61,391 | 61.39% |
What if the discount rate was different?
Present Value
$61,391
Personalized Insights
1 insight based on your inputs
Discount Factor
$1 received in 10 years is worth $0.61 today at 5% discount rate.
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Frequently Asked Questions
What is present value?
Present value (PV) is the current worth of a future sum of money or stream of cash flows given a specified rate of return. It answers: "How much is $X in Y years worth today?" This concept is fundamental to finance, helping compare money across different time periods.
What is the discount rate?
The discount rate is the interest rate used to determine present value. It represents the opportunity cost of money - what you could earn if you invested the money elsewhere. Higher discount rates result in lower present values because future money becomes less valuable.
What is the difference between ordinary annuity and annuity due?
An ordinary annuity pays at the end of each period (most common - like mortgage payments). An annuity due pays at the beginning of each period (like rent). Annuity due has a higher present value because payments are received sooner.
Why does money have a time value?
Money has time value because: 1) It can be invested to earn returns, 2) Inflation reduces purchasing power over time, 3) There's risk that future payments may not be received, 4) People generally prefer money now over later. A dollar today is worth more than a dollar tomorrow.
How is present value used in business decisions?
Present value is used to: 1) Compare investment opportunities, 2) Value bonds and stocks, 3) Evaluate business projects (NPV analysis), 4) Determine fair prices for annuities and pensions, 5) Calculate loan amounts based on payment schedules.
What is a growing annuity?
A growing annuity is a series of payments that increase at a constant rate over time. It's useful for modeling salary growth, increasing dividends, or inflation-adjusted income streams. The present value formula accounts for both the discount rate and growth rate.
How this works
Calculations are run entirely in your browser. No inputs are sent to our servers and no account is required. Formulas follow standard US definitions from the IRS and the CFPB where applicable; international users should confirm local tax and regulatory rules apply.
What this tool can’t do
When to consult a professional
This is a software engineering tool, not financial advice. Run the math here, then take the result to a certified financial planner, CPA, or your bank before making a decision that materially affects your money.
Sources
- [1]Consumer Financial Protection Bureau (CFPB)Official sourceconsumerfinance.govAccessed Apr 21, 2026
US consumer finance regulator; authoritative on mortgage disclosures, APR rules, credit cards.
Full-stack software engineer specializing in embedded systems, web architecture, and AI/ML. Founder of Practical Web Tools. Built the gesture-controlled drone IP acquired by KD Interactive (Aura Drone, sold on Amazon).