- Home
- Finance & Loans
- Present Value Calculator
Present Value Calculator
Present value tells you what a future payment is worth today, given the return you could earn in the meantime. Enter a future lump sum, a discount rate and the number of years; add a regular payment to value a stream of income such as a pension, settlement or lease.
- Total discount
- $3,860.87
- Discount factor
- 0.6139
Saved setups
Save a set of inputs you reuse — your usual rate, your loan, your room sizes — and load it back in one tap.
Your recent calculations
Results you calculate here are kept on this device so you can come back to them.
Formula
How to use it
- Enter the future amount you expect to receive.
- Enter the discount rate — the return you could get elsewhere at similar risk.
- Enter the years and frequency, plus any regular payment received at the end of each period.
Worked examples
$10,000 received in 10 years, discounted at 5%
- Present value
- $6,139.13
- Total discount
- $3,860.87
- Discount factor
- 0.6139
$1,000 a year for 5 years, discounted at 5%
- Present value
- $4,329.48
- Total discount
- $670.52
- Discount factor
- 0.7835
Choosing a discount rate
The discount rate is the opportunity cost of waiting. For a safe, guaranteed payment, use what a savings account or government bond pays. For a risky promise, use a higher rate. A higher rate always produces a lower present value: $10,000 due in 10 years is worth $6,139.13 today at 5% but $3,855.43 at 10%.
Questions people ask
What is the present value of $10,000 received in 10 years?
At a 5% discount rate, $6,139.13. The discount factor is 0.6139.
What is $1,000 a year for 5 years worth today?
At 5%, $4,329.48 — $670.52 less than the $5,000 you will actually receive.
Should I take a lump sum or payments?
Discount the payments at the rate you could realistically earn and compare the present value with the lump sum on offer. Whichever is larger is worth more in money terms, before taxes and your own need for certainty.