Present Value Calculator — What Future Money Is Worth Today
Calculate the present value of any future cash sum using PV = FV / (1+r)^n.
See what a future amount is worth today at any discount rate and time horizon.
What Is Present Value?
Present Value answers a simple but powerful question: What is money you will receive in the future worth right now?
Here is why this matters. Imagine someone offers you a choice: $1,000 today, or $1,000 five years from now. You would obviously take the $1,000 today. But what about $1,000 today versus $1,300 in five years? Now it gets interesting. Present Value helps you make that comparison.
The core idea is called the Time Value of Money: a dollar today is worth more than a dollar tomorrow, because you can invest today’s dollar and earn a return.
Think of it like this: if you can earn 5% per year, then $1,000 today becomes $1,276 in five years. Working backwards, $1,276 received five years from now is worth exactly $1,000 today. That $1,000 is the present value of $1,276.
The Formula
PV = FV / (1 + r)^n
Where:
- PV = Present Value (what the future amount is worth today)
- FV = Future Value (the amount you will receive in the future)
- r = Discount rate per period (annual interest rate, expressed as a decimal)
- n = Number of periods (usually years)
The term (1 + r)^n is called the discount factor.
It represents how much a dollar grows over n periods at rate r.
Dividing by it “reverses” the growth to find today’s equivalent.
Worked Example
What is $10,000 received in 5 years worth today if the discount rate is 7%?
PV = $10,000 / (1 + 0.07)^5 PV = $10,000 / (1.07)^5 PV = $10,000 / 1.40255 PV = $7,129.86
This means you would need to invest $7,129.86 today at 7% annual return to have $10,000 in 5 years.
Present Value Reference Table
Here is what $10,000 received in the future is worth today at various rates and time periods:
| Years | 3% | 5% | 7% | 10% | 12% |
|---|---|---|---|---|---|
| 1 | $9,709 | $9,524 | $9,346 | $9,091 | $8,929 |
| 5 | $8,626 | $7,835 | $7,130 | $6,209 | $5,674 |
| 10 | $7,441 | $6,139 | $5,083 | $3,855 | $3,220 |
| 15 | $6,419 | $4,810 | $3,624 | $2,394 | $1,827 |
| 20 | $5,537 | $3,769 | $2,584 | $1,486 | $1,037 |
| 30 | $4,120 | $2,314 | $1,314 | $573 | $334 |
Notice how dramatically the present value drops with higher rates and longer time periods. At 10% over 30 years, $10,000 is worth only $573 today!
Common Applications
- Investment analysis: Is a future payout worth the price you pay today?
- Retirement planning: How much do you need to save now to have a certain amount later?
- Legal settlements: What is a future payment stream worth as a lump sum today?
- Business valuation: What are a company’s future cash flows worth today? (This is the foundation of DCF analysis)
- Real estate: Comparing a property’s future rental income to its purchase price today
Choosing the Right Discount Rate
The discount rate should reflect the opportunity cost — what you could earn elsewhere with similar risk:
| Situation | Typical Discount Rate |
|---|---|
| Risk-free (government bonds) | 3–5% |
| Low-risk investments | 5–7% |
| Stock market average | 8–10% |
| Higher-risk investments | 10–15% |
| Venture capital / startups | 20–40% |
A higher discount rate means future money is worth less today — it reflects higher risk or better alternative opportunities.
Present Value vs. Future Value
These are two sides of the same coin:
- Present Value: “What is future money worth today?” — PV = FV / (1+r)^n
- Future Value: “What is today’s money worth in the future?” — FV = PV × (1+r)^n
If you know one, you can always calculate the other.
How we build and check this calculator
This calculator runs entirely in your browser, so the numbers you enter stay on your device. The math behind it is written by hand and tested against worked examples and standard references before the page goes live.
SuperGlobalCalculator is independently built and maintained. See how we build and verify our calculators.