Inflation Calculator
Value of money over time.
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Present Value Calculator
Discount a future amount back to what it is worth today at any rate and term.
Present value
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Worth today.
| Future amount | — |
|---|---|
| Discount factor | — |
| Total discount | — |
| Rate | — |
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How the Present Value Calculator Works
Money in the future is worth less than money now, because money today can be invested to grow. Present value answers “what is a future sum worth today?” by discounting it back at a chosen rate — dividing by one plus the rate, compounded over the years. It’s the foundation of investment appraisal, bond pricing and comparing payouts over time.
A higher discount rate or a longer wait both shrink the present value. Use a rate that reflects what you could otherwise earn, or the risk of the future payment.
present value = future amount ÷ (1 + rate)^years
Frequently Asked Questions
What is present value?
The value today of money you’ll receive in the future, discounted at a rate that reflects the time value of money. $10,000 in 10 years at 5% is worth about $6,139 now.
What discount rate should I use?
Use the return you could otherwise earn, or a rate reflecting the payment’s risk. Higher rates give lower present values.
Why is future money worth less?
Because money today can be invested to grow, and because of inflation and uncertainty. Discounting adjusts for that.
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