A walkthrough, end to end.
- 1
Enter the future amount, the discount rate (your required rate of return or expected inflation), and the number of years.
- 2
The calculator returns the present value — what that future sum is worth today.
- 3
Use it to compare cash flows at different points in time on equal footing.
Present value formula
Present value discounts a future amount by the rate of return you could earn elsewhere. The higher the discount rate, the less a future amount is worth today. Foundation of NPV, bond pricing, and investment decisions.
What you can do with this.
Lottery lump sum vs. annuity
$50M jackpot paid as $30M now or $1.5M/year for 30 years? At 5% discount, the $1.5M annuity has PV ~$23M — the lump sum wins by $7M. (After taxes, the math may shift.)
Settlement valuation
An insurance settlement offers $200K now or $20K/year for 15 years. At 6% discount, the annuity PV is ~$194K — close call. The lump sum wins slightly and gives you investment flexibility.
Bond pricing
A bond's fair price is the present value of all future coupons plus the principal repayment, discounted at current market rate. The calculator handles the math for individual cash flows.
Discount rate selection
Common defaults: risk-free rate (~4%) for very safe cash flows; cost of capital (~8–10%) for business decisions; inflation (~3%) for purchasing-power equivalence.
Inflation-adjusted comparison
Comparing a $100K offer today vs. $150K in 10 years. At 3% inflation, the future $150K has PV $111K — modest improvement. At 5%, it's just $92K — actually worse than today's offer.
Retirement planning use
How much do I need NOW to fund $50K/year of retirement spending starting in 25 years? PV of a future spending need at expected return rate gives the lump-sum target.
NPV foundation
Net Present Value is the sum of PV across multiple cash flows minus the initial investment. The calculator gives you single-year PV; for full NPV, sum across years using this same discount rate.
Present value 2026 — what's current
With 10-year Treasury yields near 4–4.5%, real risk-free rates are ~1–1.5% real. Use rates appropriate to the risk and time horizon — not blanket 7% returns.
Frequently asked.
Depends on the risk and alternative. Risk-free cash flow: 4%. Investment cost-of-capital: 8–10%. Personal opportunity cost: your portfolio's expected return. Higher rate = more aggressive discount.
PV is the present value of a single future amount. NPV (Net Present Value) sums PVs across multiple cash flows minus the initial outlay — used for project evaluation.
Lump sum often wins purely on PV if you can invest at or above the implied annuity rate. But annuity protects against bad investment decisions and reduces sequence-of-returns risk.
No. Calculations run entirely in your browser.