Present Value Calculator

Present value (PV) is what a future sum of money is worth today, given a specific interest or discount rate. Because money can earn a return over time, a dollar today is worth more than a dollar in the future. Present value reverses that growth to tell you the equivalent amount right now.

PV = FV ÷ (1 + r)^n, where FV is the future value, r is the interest rate per period, and n is the number of periods. If interest compounds more than once a year, divide the annual rate by the number of periods and multiply the years by that same number.

This is the time value of money. A dollar you have now can be invested to earn interest, so it grows into more than a dollar later. It also loses buying power to inflation over time. Present value quantifies exactly how much less a future payment is worth in today's terms.

The discount rate reflects your opportunity cost — the return you could reasonably earn elsewhere, or your required rate of return. Common choices are a savings or bond yield for low-risk cash, or an expected investment return (often 6–10%) for longer-term decisions. A higher discount rate lowers the present value.

Present value discounts a future amount back to today, while future value grows a present amount forward in time. They are two sides of the same equation: FV = PV × (1 + r)^n and PV = FV ÷ (1 + r)^n.