Find out how much a future sum of money is worth today, given a discount rate and compounding frequency.
The Present Value Calculator tells you what a future amount of money is worth in today’s dollars, once you account for the time value of money.
This is the reverse of a future value calculation and is commonly used to evaluate investments, settlements, or savings targets.
PV = FV ÷ (1 + r/n)^(n×t), where FV is future value, r is the annual discount rate, n is compounds per year, and t is years.
To have $10,000 in 10 years at a 6% annual discount rate compounded monthly, you would need to set aside about $5,496 today.
PV = FV ÷ (1 + r)^n, discounting a future amount back to today's value using a discount rate and time period.
Money now can be invested to earn returns, and inflation typically erodes future purchasing power.
It lets you compare cash flows at different times on an equal footing, essential for evaluating loans and investments.