Present Value Calculator
Determine what a future sum of money is worth in today's terms using discounted cash flow (DCF) analysis with a given discount rate.
Parameters
$
%
Yr
Results Summary
Present Value
$46,319
Discount Amount
$53,681
Future Value
$100,000
Mathematical Formula
This calculator determines the results based on the following standard financial formula for Present Value (PV):
PV = FV ÷ (1 + r)^n
Variables Glossary
- Future Value
- Amount of money in the future
- Present Value
- Current worth of the future amount
- Discount Amount
- Total reduction due to discounting
- Discount Rate
- Rate used to discount future cash flows
The present value formula discounts future money back to today, accounting for the time value of money. A higher discount rate reduces the present value.
Frequently Asked Questions
What is the time value of money?
The time value of money principle states that a dollar today is worth more than a dollar tomorrow because it can be invested and earn returns.
What discount rate should I use?
For investments, use your expected rate of return. For business valuation, use the weighted average cost of capital (WACC) or a desired rate of return.