Present Value Calculator: Time Value of Money
Our Present Value Calculator discounts future cash to today using compound formulas.
Why Use PV?
$1 tomorrow < $1 today—quantify for investments, loans, or valuations.
Key Formulas
| Type | Formula | Example |
|---|---|---|
| Single | PV = FV / (1+r)^t | $10K in 10y @5% |
| Annuity | PV = PMT × [1-(1+r)^-n]/r | $1K/mo ×10y |
| Perpetuity | PV = PMT / r | $1K forever |
Example: 5% Rate, Monthly Comp, 10 Years
- Single $10K: $6,139.14
- Annuity $1K/mo: $92,278.53 (ordinary)
- Perpetuity $1K/mo: $240,000
How It's Calculated
Effective rate per period = annual/ freq; periods = years × freq; iterative discount for table/chart.
Pro Tips
Limitations
- Constant rate
- No taxes/inflation
- Assumes reinvestment
Conclusion
Master discounting with our Present Value Calculator. Explore Finance tools.