Present Value Calculator
Calculate the present value of a future sum of money using a discount rate. Determine how much a future payment or investment is worth in today's dollars and see the total discount applied.
Present Value Calculator
FAQ
What is present value?
Present value (PV) is the current worth of a future sum of money given a specified rate of return. It is based on the concept that a dollar today is worth more than a dollar in the future.
Why is present value important?
Present value helps investors and businesses compare investment opportunities by bringing all future cash flows to their current equivalent. It is fundamental to capital budgeting, bond pricing, and financial planning.
What discount rate should I use?
The discount rate depends on the risk of the investment. Common choices include the expected rate of return, the cost of capital, or inflation rate. Higher risk investments typically use higher discount rates.