Present Value Calculator
Discount one future lump sum to its value today using a fixed annual rate, time, and compounding frequency.
Content updated July 31, 2026
Values one future lump sum only. It assumes a constant discount rate, periodic compounding, and no tax, fees, inflation adjustment, or cash flows.
Present value answers a practical question: what amount today would grow to a specified future lump sum at a chosen rate? It lets you compare money received at different times on a consistent today-value basis.
Enter the future amount, annual discount rate, time, and compounding frequency. A higher rate or longer wait produces a lower present value because today's money has more time to grow.
The Present Value formula
PV = FV ÷ (1 + r/n)^(n × t)PV = present value · FV = future lump sum · r = annual discount rate as a decimal · n = compounding periods per year · t = years.
Worked example
A $25,000 lump sum due in 10 years discounted at 6% with monthly compounding has a present value of about $13,741.
Assumptions, rounding, and limitations
Assumptions
- There is one future lump sum.
- The discount rate and compounding frequency stay constant.
- The future amount is received exactly at the end of the entered time.
Rounding: The formula uses full floating-point precision; displayed money is rounded by the selected currency formatter.
Limitations
- Does not handle payment streams, irregular dates, tax, fees, risk changes, or a separately modeled inflation rate.
- The output is only as meaningful as the selected discount rate.
Sources
- Pension or Settlement Income Streams — explanation of present value — U.S. Securities and Exchange Commission, Investor.gov
Choosing a discount rate
The rate represents the return you require or could reasonably earn over the period. Because the choice can dominate the result, compare several plausible rates instead of treating one output as certain.
This calculator handles one future lump sum. A series of payments needs each cash flow discounted for its own timing, which is a different calculation.
Frequently asked questions
▶What does present value mean?
It is the amount of money needed today to equal a specified future amount after growth at the chosen discount rate.
▶Why does present value fall when the rate rises?
At a higher assumed return, less money is needed today to reach the same future amount.
▶Can I use this for monthly payments?
Not directly. This calculator discounts one lump sum. A payment stream requires an annuity or cash-flow present-value calculation.
▶Does this account for inflation?
Only if the discount rate you choose is intentionally an inflation-adjusted real rate. The calculator itself does not separately model inflation.
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Open calculator →Disclaimer: Present Value 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.