Calculate the present value of future cash flows. Determine how much a lump sum or series of payments is worth today using the time value of money principles.
Present Value
$61,391
Total Discount
$38,609
38.6% discount
Select the type of cash flow to calculate
Calculate the present value of a single future amount.
Enter the future amount to discount
Set the discount rate and time period
Visual comparison of values across time
Shows how much $1 in the future is worth today at 5% discount rate
Mathematical formulas for each calculation type
PV = FV / (1 + r)^n
Where FV = Future Value, r = rate, n = periods
PV = PMT × [(1-(1+r)^-n)/r]
PMT = Payment amount per period
PV = PMT × [(1-((1+g)/(1+r))^n)/(r-g)]
g = growth rate per period
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% |
Present Value
$61,391
1 insight based on your inputs
$1 received in 10 years is worth $0.61 today at 5% discount rate.
Explore other tools that might help
Present value (PV) is what future money is worth today, accounting for the time value of money. The formula is PV = FV / (1 + r)^n, where FV is future value, r is discount rate, and n is periods. 10,000 in 10 years at 7% discount rate has a present value of 5,083.49. Calculate at practicalwebtools.com.
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.
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.
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.
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.
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.
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.
Present Value
$61,391
Total Discount
$38,609
38.6% discount