What discount rate should I use?

Use your opportunity cost — what you could earn by investing the money elsewhere. Common choices are the risk-free rate (Treasury bond yield), the market return (~7–10%), or your personal hurdle rate.

What is present value used for?

PV is used in investment analysis, bond pricing, mortgage calculations, lottery payout comparisons, and business valuation. It's fundamental to the time value of money concept.

How does present value relate to future value?

They're inverses. FV = PV × (1+r)^n grows money forward in time. PV = FV / (1+r)^n discounts money back to today.

Present Value Calculator (PV)

The Present Value Calculator answers a fundamental finance question: what is a future sum of money worth today? Because money today can be invested to grow, a dollar today is worth more than a dollar in the future. By discounting a future value at a given rate, you can compare options on equal footing — whether evaluating an investment, a lump sum payout, or the value of future cash flows.

Future Value ($)

Discount Rate (% per period)

Number of Periods (years)

Frequently Asked Questions

Present Value (PV) is the current worth of a future sum of money, discounted at a specific rate. PV = FV / (1 + r)^n, where FV is future value, r is the discount rate per period, and n is the number of periods.

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