Finance
Present Value Calculator
Work out what a future amount is worth in today's money at a given discount rate.
This present value is what the future amount is worth in today's money at the discount rate you entered.
Formula
Present value equals future value divided by one plus the rate, raised to the number of years.
How it works
A dollar in the future is worth less than a dollar today because today's dollar could be invested. This calculator reverses the growth formula to find today's equivalent.
Worked example
For example, $20,000 due in 10 years at a 5% annual discount rate has a present value of $12,278.27, because $20,000 ÷ 1.05^10 = $12,278.27.
FAQs
When is present value used?
To compare future payments, judge investments, and price bonds or annuities.
What rate should I use?
A rate reflecting what you could otherwise earn, or the inflation rate for real value.
Why is it lower than the future value?
Because of discounting — money today has earning power.
Are these figures financial advice?
No — they are estimates for planning only, not financial advice. Check with a qualified adviser for decisions involving large sums.
Estimates only, not financial advice. Figures are approximate and do not include all fees, taxes, or changing rates unless stated.
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