Present Value Calculator
What a future amount, or a stream of future payments, is worth today.
Present value runs compounding backwards: money later is worth less than money now, because money now can be invested.
How the present value calculator works
Present value runs compounding backwards: money later is worth less than money now, because money now can be invested. PV = FV / (1+r)ⁿ.
The discount rate is the whole argument. It is not "inflation" — it is the return you could get on the money instead, so a higher rate makes future money worth less today. Two people can value the same future payment very differently and both be right, because their alternatives differ.
Enter a single future amount, a stream of equal payments, or both.
Formula: PV = FV/(1+r)ⁿ + PMT·[1 − (1+r)⁻ⁿ]/r
Worked examples
| Inputs | Present value | Note |
|---|---|---|
| 100,000 in 10 years at 5% | £61,391.33 | worth 61,391 today |
| A payment stream instead | £94,765.59 | the present value of 120 payments |
| Money due tomorrow | £100,000.00 | no discounting — worth its face value |
FAQFrequently asked questions
What is present value?
What money arriving in the future is worth today, given a rate you could otherwise earn.
What discount rate should I use?
The return you could realistically get on the money instead. There is no universally right answer, which is why two people can value the same payment differently.
Is the discount rate the inflation rate?
No. Inflation erodes purchasing power; the discount rate is your opportunity cost. They are related but not the same number.
Why is money later worth less?
Because money now can be put to work. A pound in ten years cannot earn anything in the meantime.
What is a discount factor?
The multiplier that converts a future amount to today's money — 0.6139 for ten years at 5%.
Where these figures come from
- CFA Institute — Quantitative Methods: The Time Value of Money — the discounting, annuity and IRR conventions used here
- US Federal Reserve — Regulation Z (Truth in Lending), APR calculation — why APR includes fees where a nominal rate does not
- MoneyHelper (UK Government-backed) — the UK's free money guidance service
Last checked: September 2026. These are the standard textbook formulas; the conventions named are those of the CFA Institute curriculum and ISO 80000 usage.