Present Value Calculator

Calculate the present value of a future sum discounted at a given interest rate.

Discount future cash flowsLump sum or paymentsUpdated May 2026

Present Value Calculator

Estimate value today based on discount rate, time, compounding, and cash flow type.

Currency

Future value is the amount expected later.

%

Reflects required return, interest rate, or opportunity cost.

yrs

More time usually lowers present value when the discount rate is positive.

Compounding frequency can affect the calculation.

Estimated present value

£5,083.49

Based on your inputs and assuming a 7.00% discount rate.

Future value / cash flow total

£10,000.00

Undiscounted future amount.

Total discount amount

£4,916.51

Future amount minus present value.

Discount rate

7.00%

Annual rate entered.

Time period

10 years

10 total period(s).

Present value factor

0.5083

PV divided by future value.

Compounding

1× / year

Periods per year.

A higher discount rate lowers the present value of future money.
Updated May 2026Formula verifiedReviewed for accuracy

Valuation-focused

Convert future cash flows into today’s money using a selected discount rate.

Assumption-driven

Discount rate assumptions can significantly change the result.

Comparison support

Present value helps compare future money, payments, projects, and offers.

Dynamic Present Value Insights

A future amount of £10,000.00 is worth about £5,083.49 today at a 7.00% discount rate.
The discount reduces the future amount by approximately £4,916.51.
Higher discount rates lower present value because future money is valued less today.
Longer time horizons reduce present value when the discount rate is positive.
Present value helps compare future cash flows using today’s money.
Actual outcomes may vary, and discount rate assumptions can significantly change the result.

What Present Value Means

Today’s value

Present value estimates what future money is worth today.

Time value

Money received sooner is usually worth more than money received later.

Discounting

Discounting converts future cash flows into today’s money.

Finance uses

PV is used in investing, loans, pensions, annuities, and valuation.

Present Value vs Future Value

Present value

Present value asks: what is this future amount worth now?

Future value

Future value asks: what could this amount grow to later?

Discount Rate, Time, and Compounding

Discount rate

The rate used to value future money today.

Higher rate

Higher discount rates reduce present value.

Longer time

Longer time periods usually reduce present value.

Compounding

Compounding frequency can affect the calculation.

Lump Sum vs Recurring Cash Flows

Lump sum

Discounts one future amount back to today.

Annuity

Discounts a stream of equal recurring payments.

Payment timing

Earlier payments are worth more than later payments.

Irregular cash flows

Irregular cash flows should be discounted individually.

Investment and Valuation Use Cases

Investment valuation
Retirement planning
Pension payouts
Annuity payments
Bond valuation
Business projects
Loan comparisons
Settlement offers

Present Value Formula

Present Value = Future Value ÷ (1 + r)^n

PV = FV ÷ (1 + r/m)^(m × t)

PV = PMT × [1 − (1 + r)^−n] ÷ r

PV Due = Ordinary Annuity PV × (1 + r)

PV is present value, FV is future value, r is discount rate per period, m is compounding periods per year, t is years, n is number of periods, and PMT is recurring payment. Formulas may vary depending on cash flow timing.

Frequently Asked Questions