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Present Value Calculator

TIME VALUE OF MONEY · DISCOUNT A LUMP SUM OR REGULAR PAYMENTS

What is a future payment worth today? Enter the discount rate, the years and the amount you will receive, as a lump sum, regular payments or both, to get the present value.

Receiving $10,000.00 in 5 years · discounted at 6% a year
Example · $10,000 in 5 years at 6%

Payments are made

The rate is a nominal yearly rate split across the periods: 12 periods at 6% is 0.5% a period. Monthly payments over 5 years: 12 periods per year, 5 years.

Present value

$7,472.58

Effective annual rate 6.00%

Today value of the lump sum

$7,472.58

Today value of the payments

$0.00

Discount factor

0.747258

Payments added up, not discounted

$0.00

Periods

5

Rate per period

6.00%

At 6% a year, what you receive later is worth $7,472.58 today.

How to use the present value calculator

  1. Enter the discount rate as a percent a year: the return you could earn elsewhere.
  2. Enter the number of years and how many periods make a year (1 for yearly, 12 for monthly).
  3. Enter the lump sum you receive at the end, a regular payment each period, or both.
  4. Choose whether the payments arrive at the end of each period or at the start.
  5. Read the present value and the split between the lump sum and the payments.

Present value formula

The yearly rate is split evenly across the periods: the rate per period is the yearly rate divided by the periods per year.

  • Rate per period r = yearly rate / periods per year
  • Periods n = years x periods per year
  • PV of the lump sum = FV / (1 + r)^n
  • PV of the payments = PMT x (1 - (1 + r)^-n) / r
  • Payments at the start: multiply the payments part by (1 + r)

Worked example: $10,000 in five years

You will receive $10,000 in 5 years and your discount rate is 6% a year, compounded yearly:

  • (1.06)^5 = 1.3382256
  • PV = 10,000 / 1.3382256 = $7,472.58

So $7,472.58 today, invested at 6%, grows to $10,000 in five years. At 3% the same payment would be worth $8,626.09.

Where to go next

Going the other way? The Future Value Calculator grows money forward. Comparing a project with uneven flows? Use the NPV Calculator.

Planning a leveraged trade? Check position size, liquidation distance and funding cost before you open it:

Run Pre-Trade Risk Check

Use via API or MCP

The same calculation is available as the MCP tool workflow.run_present_value: a script or an AI agent gets the exact number with the formula published, instead of a model doing the arithmetic in its head.

Get API key View API docs

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FAQ
Q.01

What is present value?

It is what money you receive later is worth today. A dollar today can be invested, so a dollar in five years is worth less than a dollar now. Present value turns a future amount into today money using a discount rate.

Q.02

What is the present value formula?

For a single amount: PV = FV / (1 + r)^n, where r is the rate per period and n is the number of periods. For regular payments, add PMT x (1 - (1 + r)^-n) / r. A payment at the start of each period is worth (1 + r) times as much.

Q.03

What discount rate should I use?

The return you could earn on something of similar risk: a savings rate for a safe amount, a higher rate for a risky one. The calculator does not pick it for you; the result moves a lot with it, so try two or three values.

Q.04

How do monthly payments work here?

Set periods per year to 12 and enter the years. The yearly rate is split into 12 equal rates (6% becomes 0.5% a month) and each payment is discounted for its own month. The payment is the amount for one period.

Q.05

What is the difference between payments at the end and at the start?

A payment at the start of a period is received one period earlier, so it is worth more today by a factor of (1 + r). Rent and insurance usually come at the start; loan payments and most savings at the end.

Q.06

Is this the same as the NPV calculator?

NPV adds up uneven flows you type one by one, including the amount you pay now. This page is for a single amount or level payments. For a project with different flows each period, use the NPV Calculator.