Present Value Calculator – What a Future Sum Is Worth Today
A dollar promised years from now is not a dollar today. Enter a future amount — or a stream of regular payments — and this calculator discounts it back to what it is really worth right now, at any rate you choose.
Discount a future sum
One amount, received once, at a future date.
Watch time shrink a future sum
The curve shows what the same money is worth today, depending on how far away it is. The further out, the smaller today’s value — the dot marks your numbers.
Discounting is compounding run in reverse. Each year you wait, today’s value is divided by (1 + rate) one more time — which is why the curve falls steeply at first and then flattens.
At 8%, money halves in value roughly every 9 years: $10,000 due in 10 years is worth just $4,631.93 today, and in 20 years only about $2,145. A higher discount rate makes the curve dive faster; a lower one keeps future money closer to face value.
Investors use exactly this math to price bonds, compare settlement offers, value pensions and decide whether a future payout beats cash in hand.
Keep going with time-value tools
Present value is one corner of the time-value-of-money toolbox — these cover the rest.
How to find a present value
Three steps, instant answers.
One sum, or a payment amount with how long it runs.
What that money could earn — or inflation — per year.
The most you should pay today for that future money.
⚙️How present value works
Money today can be invested, so it can grow. Money arriving later has missed all that growth — present value strips the growth back out, answering one question: what is that future money worth in today’s dollars?
Annuity PV = PMT × (1 − (1 + i)^−N) ÷ i · i = r ÷ m, N = m × n
Worked example: $10,000 arriving in 10 years, discounted at 8% → $10,000 ÷ 1.08¹⁰ = $4,631.93. Pay more than that today and you would have done better investing at 8% yourself. A stream works the same way, payment by payment: $200 a month for 10 years at 6% adds up to $24,000 of payments, but its present value is $18,014.69 — the waiting costs $5,985.31.
How is this different from a full TVM calculator? A time-value-of-money solver juggles five variables at once (PV, FV, rate, term and payment) and solves for whichever one you leave blank — powerful, but easy to set up wrong. This page does exactly one job, present value, with the two shapes future money actually arrives in: a single sum or a stream of payments. For whole projects with money going both ways, use the NPV calculator instead.
An ordinary annuity pays at the end of each period — loan repayments and bond coupons work this way. An annuity due pays at the start — rent and insurance premiums. Every annuity-due payment arrives one period earlier, so each one is discounted one period less, and the whole stream is worth exactly (1 + i) times the ordinary value.
On the worked example — $200 a month for 10 years at 6% — ordinary annuity: $18,014.69; annuity due: $18,104.76. The $90.07 gap is one month of discounting on every payment.
The discount rate is your opportunity cost — what the money could earn if you had it today instead. Safe choices people actually use: the return on a savings account or Treasury (roughly 4–5%), expected inflation if you only want today’s purchasing power, or your investment portfolio’s expected return for riskier comparisons.
The rate matters more than the amount: $10,000 in 10 years is worth $7,440.94 at 3% but only $3,855.43 at 10%. When a salesperson quotes a future value, rerun it here at two or three rates before deciding — if a deal only looks good at a tiny discount rate, it is not a good deal.
Frequently asked questions
It is what a future amount of money is worth in today’s dollars. Because money today can earn interest, a future sum is always worth less right now: at 8%, $10,000 arriving in 10 years is worth just $4,631.93 today.
For one sum: PV = FV ÷ (1 + r)^n, where r is the yearly rate and n the years. For a stream of equal payments: PV = PMT × (1 − (1 + i)^−N) ÷ i, with i the rate per payment period and N the number of payments. A 0% rate makes PV simply equal the total of the payments.
Present value discounts one future sum or one even payment stream. Net present value (NPV) discounts a whole set of uneven cash flows — money in and money out at different times — and subtracts the upfront cost. NPV is the project-appraisal tool; PV is the building block it is made of.
Use the return your money could realistically earn instead — your opportunity cost. For a safe comparison, a savings or Treasury rate around 4–5% works; to keep today’s purchasing power, use expected inflation; for investment comparisons, your expected portfolio return. Try 3%, 6% and 10% and see how much the answer moves.
At a 6% discount rate, the 120 payments total $24,000 but their present value is $18,014.69 if each is paid at month-end, or $18,104.76 if paid at the start of each month (annuity due). Switch this calculator to “Series of payments” to run your own amounts.
Only with a negative discount rate — a situation where money loses value just sitting still, as happened briefly with negative-yield bonds. At any positive rate, present value is always smaller than the future amount, and a 0% rate makes them exactly equal.
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