Present Value Calculator
Present value is future value run in reverse: it tells you what a sum of money you will receive later is worth in today’s terms. Because money you have now can be invested to earn a return, a future payment is always worth less today — and this calculator shows exactly how much less, for any discount rate and currency.
- Present value
- Discount
- Future value
- $100,000.00
- Discount
- $53,680.65
Discounted annually at 8%, 100,000 arriving in 10 years is worth only 46319 today. The 53681 gap is the time value of money — the cost of waiting.
How it works
Present value applies a discount rate to shrink a future amount back to today. The discount rate represents the return you could earn elsewhere, or the risk that the future payment is uncertain: the higher the rate, the less a future sum is worth now. The calculator divides the future amount by a growth factor built from the periodic rate (annual rate divided by the number of compounding periods) raised to the number of periods.
This is the backbone of valuation. Investors use present value to price bonds, compare a lump sum against a stream of payments, and decide whether a future payoff justifies money spent today. More frequent compounding discounts slightly harder, lowering the present value. Switch the currency at the top to view your numbers.
PV = FV / (1 + r/m)^(m·t), where FV = future amount, r = annual discount rate (as a decimal), m = compounding periods per year, and t = years. The discount = FV − PV is the amount the future sum is reduced by to reflect the time value of money.
Worked example
Suppose you are promised 100,000 in 10 years and your discount rate is 8% compounded annually. With m = 1, there are 10 periods. Using PV = 100,000 / (1 + 0.08)^10, the present value is about 46,319. In other words, that future 100,000 is worth only around 46,319 to you today — the remaining 53,681 is the discount, the price of having to wait a decade to receive it.
Things to watch out for
A 0% discount rate means a future sum is worth its full face value today — there is no time-value penalty. The higher the rate or the longer the wait, the smaller the present value: far-off payments shrink dramatically. More frequent compounding discounts marginally harder, so a monthly-compounded present value is slightly below the annual one at the same rate. Choosing the discount rate is the hard part — too low overvalues the future payment, too high undervalues it; a common choice is your expected investment return or the yield on a comparable safe asset.
Frequently asked questions
What is present value?+
Present value is what a future sum of money is worth in today’s terms after applying a discount rate. It reflects the time value of money — the principle that money available now is worth more than the same amount in the future because it can earn a return.
How do I choose a discount rate?+
A common choice is the return you could reasonably earn on a comparable investment, or the yield on a safe asset such as a government bond. A higher rate lowers the present value; the right rate reflects your opportunity cost and the risk of the future payment.
How is present value related to future value?+
They are inverses. Future value grows a present amount forward at a rate; present value discounts a future amount back at a rate. Run the same number through both with matching inputs and you return to where you started.
Can I use this for any currency?+
Yes — the discounting formula does not depend on currency. Use the switcher at the top of the page to view your numbers.
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Disclaimer: This calculator is for educational and informational purposes only and provides estimates, not financial advice. Interest rates, taxes, fees, and local rules vary and change over time. Confirm figures with a qualified professional before making any financial decision.
Last reviewed: 2026-06-22