Present Value Calculator
Calculate the current worth of future cash flows
Cash Flow Details
Results
Present Value
$0
Future Value
$0
Discount Rate
0%
Time Period
0 years
Compounding
–
Value Over Time
Discount Factor
Year-by-Year Breakdown
| Year | Present Value | Discount Factor | Future Value |
|---|
About Present Value
The Present Value (PV) is the current worth of a future sum of money or stream of cash flows given a specified rate of return.
Key Concepts
- Time Value of Money: Money available now is worth more than the same amount in the future due to its potential earning capacity.
- Discount Rate: The interest rate used to determine the present value of future cash flows.
- Compounding: How often the discounting is applied within each time period.
Common Uses
- Evaluating investment opportunities
- Calculating loan payments
- Determining the value of pensions or annuities
- Comparing cash flows at different times
Formulas
Discrete Compounding: PV = FV / (1 + r/n)^(n×t)
Continuous Compounding: PV = FV × e^(-r×t)
Where:
FV = Future Value
r = Annual discount rate
n = Compounding periods per year
t = Time in years
e = Euler’s number (~2.71828)