Present Value Calculator
Work backwards from a future target to estimate what that amount is worth today. Use it for savings goals, investment planning, retirement targets and future-value comparisons.
Present value formula
FV is the future value, r is the annual discount rate and n is the number of years. A higher discount rate or longer timeline lowers the present value.
Example
If you want $100,000 in 10 years and assume a 7% annual return, the present value is about $50,835. That means $50,835 invested today at 7% could grow to roughly $100,000 over 10 years.
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FAQ
What is present value?
Present value is the amount a future sum is worth today after discounting it by an assumed rate.
Can I use inflation as the rate?
Yes, if the goal is to estimate purchasing power rather than investment growth.
Is this financial advice?
No. This is an educational calculator and does not include taxes, fees or personal risk.
What $100,000 in the future is worth today
Present value runs compound interest backwards. Instead of asking what today's money becomes, it asks what tomorrow's money is worth now — the question behind every “lump sum or instalments?” decision and every comparison between an amount you have and an amount you have been promised.
| Received in | At 5% discount rate | At 7% | At 10% |
|---|---|---|---|
| 5 years | $77,921 | $70,541 | $60,779 |
| 10 years | $60,716 | $49,760 | $36,941 |
| 20 years | $36,864 | $24,760 | $13,646 |
| 30 years | $22,383 | $12,321 | $5,041 |
Present value of $100,000, discounted monthly.
A promise of $100,000 in thirty years is worth about $12,321 today at a 7% discount rate. That is not a trick of arithmetic; it is the amount you would need to invest now, at that rate, to have $100,000 then. The discount rate is doing all the work, which is why the rate you choose matters more than the precision of the calculation.
The defensible choice is the return you could realistically earn on the money instead. If you would otherwise hold cash, a low rate is honest. If the alternative is paying down debt at 9%, that is the rate. Picking a high rate to make a future sum look small is how present value gets misused.
Where present value is the right tool
- Lump sum versus instalments. Discount each instalment to today and add them up. If the total beats the lump sum offer, the instalments are worth more.
- Judging a future goal. A $500,000 retirement target thirty years out is a different problem once you know its present value — it converts a distant number into a deposit you can act on today.
- Comparing offers with different timings. Money arriving sooner is worth more, and present value is how much more, in dollars rather than intuition.
- Sanity-checking a projection. If a plan's present value exceeds what you could plausibly invest, the plan needs a longer timeline or a bigger contribution, not a higher rate.
The formula is the compound interest formula rearranged: PV = FV ÷ (1 + r/n)n×t. Everything that makes future value grow makes present value shrink. That symmetry is covered in present value vs future value.
One convention note that causes most of the confusion between calculators: discounting monthly and discounting annually give different answers. $100,000 in ten years at 7% is $49,760 discounted monthly and $50,835 discounted annually. Neither is wrong; they answer slightly different questions. This page discounts at the frequency you select.
Questions about present value
What discount rate should I use?
The return you could otherwise earn on the money, after fees. For most people that is a diversified portfolio assumption or the interest rate on debt they could repay instead. There is no universally correct figure, which is why testing two rates is better than agonising over one.
Is present value the same as inflation-adjusting?
No, though they are often confused. Present value discounts by opportunity cost — what the money could have earned. Inflation adjustment discounts by the loss of purchasing power. You can apply both, and nominal vs real return explains how they interact.
Why is the present value so much smaller than the future amount?
Because compounding over long periods is powerful in both directions. Over thirty years at 7% a sum grows roughly eightfold, so running it backwards divides by roughly eight.
Does present value tell me whether an investment is good?
It tells you what a future cash flow is worth under your assumed rate. Whether that makes something a good investment also depends on risk, certainty and your alternatives — none of which appear in the formula.