Present Value Calculator
Work out what a future sum is worth in today's money at a given discount rate.
Enter your details below.
How to use
- Enter the amount you expect to receive in the future.
- Enter the annual discount rate and how many years away it is.
- Press Calculate to see its value in today's money and the discount.
About this tool
This calculator discounts a future amount back to today using the formula present value = future value divided by (1 + r) raised to the power of t, where r is the annual discount rate and t is the number of years. The difference between the future amount and the present value is the discount, which reflects the fact that money available later is worth less than money available now.
Frequently asked questions
Why is future money worth less today?
Because money today can be invested and earn a return, while money in the future cannot. Discounting adjusts for that lost opportunity over time.
What rate should I use?
Use a rate that reflects the return you could earn elsewhere or the cost of waiting, such as a savings or investment return. A higher rate gives a lower present value.