NPV Calculator
Discount a signed series of monthly, quarterly, or annual cash flows to period zero.
Content updated August 2, 2026
| Period | Cash flow | Factor | Present value | Cumulative NPV |
|---|---|---|---|---|
| 1 | $30,000.00 | 0.925926 | $27,777.78 | -$72,222.22 |
| 2 | $35,000.00 | 0.857339 | $30,006.86 | -$42,215.36 |
| 3 | $40,000.00 | 0.793832 | $31,753.29 | -$10,462.07 |
| 4 | $45,000.00 | 0.73503 | $33,076.34 | $22,614.27 |
End-of-period model only. NPV depends on the cash-flow estimates, timing, discount rate, inflation basis, taxes, and risks entered; it is not a recommendation or a guarantee of project performance.
Net present value expresses an initial outlay and future net cash flows in period-zero units. Each future amount is discounted for its timing, then the discounted amounts are added to the negative initial investment.
Enter future cash flows in order, including negative values where a later period has a net cost. Choose their interval and provide an effective annual discount rate; the calculator converts that annual rate to an equivalent monthly, quarterly, or annual periodic rate.
The NPV formula
NPV = −I₀ + Σ[CFₜ ÷ (1+rₚ)^t]; rₚ = (1+rₐ)^(1/k)−1I₀ = non-negative initial outlay · CFₜ = signed end-of-period cash flow · rₐ = effective annual discount rate · k = 12 monthly, 4 quarterly, or 1 annual period · rₚ = equivalent periodic rate.
Worked example
For a $100,000 initial investment, annual cash flows of $30,000, $35,000, $40,000, and $45,000, and an 8% effective annual discount rate, the modeled present value of future cash flows is about $122,614.27 and NPV is about $22,614.27.
Assumptions, rounding, and limitations
Assumptions
- The initial investment occurs at period 0 and is entered as a non-negative outlay.
- Future cash flows are signed net amounts occurring at the end of equally spaced periods.
- The annual discount rate is effective and converted to an equivalent periodic rate.
- Cash flows and the discount rate use a consistent nominal or real inflation basis.
- All money inputs and outputs use the selected currency unit.
Rounding: Discount factors and present values retain floating-point precision. Displayed factors use up to six decimal places and currency values use up to two.
Limitations
- Supports 1–120 future cash flows, individual amounts from -1 trillion to 1 trillion, an initial outlay up to 1 trillion, and annual discount rates from -90% to 1,000%.
- Only regular monthly, quarterly, or annual end-of-period timing is supported; irregular dates, mid-period flows, continuous discounting, taxes, financing structures, terminal-value methods, and probability-weighted scenarios are excluded.
- The calculation does not choose the discount rate, validate cash-flow forecasts, or provide an investment recommendation.
Sources
- Circular A-94: Guidelines and Discount Rates for Benefit-Cost Analysis — U.S. Office of Management and Budget
- OMB Circulars and current A-94 materials — U.S. Office of Management and Budget
- Discount Rate Policy — U.S. Government Accountability Office
Cash-flow timing and equivalent periodic rates
The first listed amount is period 1 and is discounted once. The second is period 2 and is discounted twice. This calculator treats every amount as an end-of-period lump sum.
For monthly or quarterly cash flows, the effective annual discount rate is converted using compounding equivalence rather than divided by 12 or 4. This keeps one year's total discount consistent across the selected interval.
Choosing and interpreting a discount rate
OMB Circular A-94 explains that future benefits and costs must be discounted to reflect the time value of money and that real rates should be paired with real cash flows while nominal rates should be paired with nominal cash flows.
A positive or negative NPV is a result of the entered forecasts and rate, not a complete decision rule. Cash-flow uncertainty, financing constraints, taxes, strategic effects, alternatives, risk adjustments, and sensitivity to the discount rate may require separate analysis.
Frequently asked questions
▶What is net present value?
NPV is the sum of discounted future net cash flows minus the initial period-zero investment.
▶When does each cash flow occur?
Every listed amount is modeled at the end of its numbered month, quarter, or year. The first amount is period 1.
▶Can a future cash flow be negative?
Yes. Enter a minus sign for a period with a net cost, additional investment, or other outflow.
▶Why not divide the annual rate by 12 for monthly cash flows?
The calculator treats the entered rate as effective annually and converts it to an equivalent monthly rate, so twelve monthly discount periods reproduce the annual rate.
▶Does a positive NPV guarantee a good investment?
No. It only means discounted cash flows exceed the initial outlay under the entered estimates and discount rate. Forecast error and omitted risks can change the result.
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Open calculator →Disclaimer: NPV Calculator results are estimates for general information and education only, and are not financial, tax, legal or medical advice. Verify important decisions with a qualified professional.