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Present Value Calculator

What is a future amount worth today, given a discount rate? PV = FV / (1 + r/n)^(n·t).

Inputs

Future value

Discount rate

Years to future

Compounding

Present value

$25,417.46

$50,000.00 in 10 years @ 7%

Discount factor

0.5083

Total discount

$24,582.54

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PV = FV ÷ (1 + r/n)^(n·t). Higher rate or longer horizon = lower present value.

Why do I discount future money?

A dollar today can be invested at rate r and grow. A dollar received in the future is worth less because you missed that growth.

What discount rate should I use?

Your opportunity cost — the return you could realistically earn on money today (e.g. 5–7% for a diversified investor).

Does inflation affect this?

Yes. Use a real discount rate (nominal − inflation) if you're comparing to today's purchasing power.

What if the discount rate is 0%?

PV = FV. Money in the future is worth the same as today only if you can't earn any return.

Is PV used in stock valuation?

Yes — DCF (discounted cash flow) analysis sums the PV of all future free cash flows to estimate intrinsic value.