Find what money you'll receive later is worth today, at a given discount rate. Works for a single future amount, a series of regular payments, or both.
Estimates for planning, not financial, tax or legal advice. Figures use US rules unless the page says otherwise.
The present value formulas
For a single future amount, discount it back n periods at the rate per period i:
PV = FV ÷ (1 + i)ⁿ
For a series of equal payments (an annuity), add up each payment's present value:
PV = PMT × (1 − (1 + i)−n) ÷ i × (1 + i) if payments are at the start
Here i = yearly rate ÷ periods per year, and n = years × periods per year. A lump sum can be discounted over a part period: $10,000 in 2.6 years at 6% is 10,000 ÷ 1.062.6 = $8,594.19. Payments come a whole number of times, so for them n is rounded to whole periods, and the result says so.
Worked examples
- $10,000 received in 10 years, discounted at 6% a year: 10,000 ÷ 1.06¹⁰ = $5,583.95. Money in hand today that earns 6% would grow to $10,000 in 10 years.
- $1,000 a year for 10 years at 5%, paid at the end of each year: $7,721.73. Paid at the start of each year: $8,107.82.
- $500 a month for 30 years at 6%: $83,395.81. That's also the mortgage you could borrow with a $500 payment at 6%.
Choosing the discount rate
The rate is what you could earn elsewhere at similar risk. For a safe, guaranteed payment, use a Treasury or CD rate. For something riskier, use a higher rate. A higher rate always gives a lower present value.
Limitations
- Payments must be equal and evenly spaced. For uneven amounts, use the NPV calculator.
- Inflation, taxes and the risk the payment never arrives aren't modeled, except through the rate you choose.
Sources
How we checked this
Before every update, this calculator is run in a real browser with these known answers, and it must match all of them:
- $10,000 in 10 years at 6% is worth $5,583.95 today ✓
- $1,000 a year for 10 years at 5%: $7,721.73 ✓
- Same paid at the start of each year: $8,107.82 ✓
- $500 a month for 30 years at 6%: $83,395.81 ✓
- $10,000 in 2.6 years at 6%: exact exponent gives $8,594.19 ✓
- A lump sum reads "in 10 years", not "spread over" ✓
- 0% rate: $1,000 plus 12 × $100 is worth $2,200 ✓
Last checked October 26, 2026. Spotted something wrong? The math is done in your browser with the formula shown on this page, so you can check any result by hand.
Questions people ask
What is present value?
What a future sum of money is worth today, given a rate you could earn in the meantime. $1,000 a year from now is worth about $952 today at 5%.
How do I calculate the present value of an annuity?
Use PV = PMT × (1 − (1 + i)⁻ⁿ) ÷ i. For $1,000 a year for 10 years at 5%: 1,000 × (1 − 1.05⁻¹⁰) ÷ 0.05 = $7,721.73.
What is the difference between an ordinary annuity and an annuity due?
An ordinary annuity pays at the end of each period; an annuity due pays at the start, like rent. An annuity due is worth (1 + i) times more, because each payment arrives one period sooner.
Should I take a lump sum or payments?
Find the present value of the payments at a realistic rate and compare it with the lump sum. If the lump sum is larger, it's worth more, before taxes and risk.
Why does present value fall as the rate rises?
A higher rate means money today could grow faster, so you need less today to match the same future amount.