Calculate the present value or future value of a lump-sum amount using annual compounding and a discount rate.
Present value is what a future sum of money is worth today, given a discount rate: Formulas: • PV = FV ÷ (1 + r)^t • FV = PV × (1 + r)^t Here FV is the future amount, r is the annual interest or discount rate as a decimal (e.g. 6% = 0.06), and t is the number of years. This calculator uses annual compounding and a single lump sum. A higher discount rate or a longer timeline lowers the present value because money available today could earn compound interest.
Enter 15,000 as the future amount, 6 as the annual rate, and 10 as the timeline in years:
It's the value today of money you'll receive in the future, reduced by a discount rate. It reflects that money available now can be invested and grow.
Because money today can earn interest. To match a future sum, you'd need to invest less today, and that smaller amount is the present value. The longer the wait and the higher the rate, the bigger the difference.
It depends on the situation. Common choices are the return you could earn on a comparable investment, a savings or bond rate, or the interest rate on a loan you're paying. The result is only as reliable as the rate, so try a few.
Present value is what a future amount is worth today, and future value is what a present amount will be worth later. They are the same formula solved in opposite directions, and this calculator does either.
No. It values a single lump sum with annual compounding. For regular payments such as an annuity or loan payments, you need a calculator built for that. This is general information, not financial advice.
Your feedback helps us improve.
