Present Value Calculator
Find what a future sum or stream of payments is worth in today's money.
What the Present Value Calculator does
Present value runs compounding backwards: it tells you what a future amount is worth today given the return you could otherwise earn. It is how lottery lump sums, pension buyouts and legal settlements are valued.
Formula
PV = FV ÷ (1 + r)ⁿPV of annuity = PMT × (1 − (1 + r)⁻ⁿ) ÷ r
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Future value | selected currency | Optional | Accepts 0 or more. |
| Payment per period | selected currency | Optional | Accepts 0 or more. |
| Discount rate per year | % | Yes | — |
| Number of years | years | Yes | Accepts more than 0, up to 100. |
| Compounding / payment frequency | one of 7 options | Yes | — |
| Payments occur | one of 2 options | Yes | — |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Compounding / payment frequency and Payments occur.
- Enter Discount rate per year and Number of years.
- Optionally add Future value and Payment per period.
- Select Calculate.
Worked example
You are offered $50,000 in 10 years. What is it worth today at a 6% discount rate?
- Future value
- 50000
- Rate
- 6
- Years
- 10
- Frequency
- Annually
50,000 ÷ 1.06¹⁰ = $27,919.74 today.
Frequently asked questions
Should I take the lump sum or the annuity?
Compare the lump sum to the present value of the payment stream at a realistic discount rate. If the lump sum is larger, and you will actually invest it, take it.