Present Value & Future Value Calculator

Q: What discount rate should I use?

Use the return you could earn on a comparable alternative investment — your opportunity cost. For personal decisions that is often the expected return of a diversified portfolio (around 6-8%). A business typically uses its weighted average cost of capital. A higher discount rate makes future money worth less today.

Q: What is the difference between present value and net present value?

Present value discounts a single future amount or a stream of equal payments back to today. Net present value (NPV) does the same for an irregular series of cash flows and then subtracts the upfront cost, giving a single number that is positive when an investment adds value.

Q: Why is a dollar today worth more than a dollar tomorrow?

Three reasons: a dollar today can be invested and earn a return, inflation erodes the buying power of future dollars, and a promised future payment carries the risk it may not arrive. Together these make money have a time value.



Adjust the inputs above to see the breakdown.

What is the Present & Future Value Calculator?

The Present & Future Value Calculator applies the core time-value-of-money formula: grow a lump sum, plus an optional recurring payment, forward to a future value — or discount a future target back to what it is worth today.

How to Use This Calculator

Pick what to solve for. "Grow a lump sum → FV" turns a starting amount into a future value. "Discount a future sum → PV" tells you what a future target is worth today.
Enter the amount — a starting balance in FV mode, or the future target in PV mode.
Add a payment per period if money is added (FV) or set aside (PV) every period. Leave it at 0 for a pure lump-sum calculation.
Enter the annual rate, the number of periods, and the compounding frequency.
Read the results: the solved value, your total contributions, and the portion that is interest or growth. The chart traces the running value over every period.

How does the underlying math work?

Future value of a present amount plus an ordinary annuity of payments:

FV = PV (1 + i)ⁿ + PMT × [ ((1 + i)ⁿ − 1) ÷ i ]

Rearranged to solve for the present value that reaches a future target:

PV = ( FV − PMT × [ ((1 + i)ⁿ − 1) ÷ i ] ) ÷ (1 + i)ⁿ

i — rate per period = annual rate ÷ compounding frequency
n — total number of periods
PMT — payment made at the end of each period

Real-world practical application

It is the tool behind comparing a lump-sum settlement to a stream of payments, valuing a future obligation such as a balloon payment or a tuition bill, and working out how much to invest today to reach a specific dollar target by a specific date.

Frequently Asked Questions

What discount rate should I use?

Use your opportunity cost — the return available on a comparable alternative. For personal decisions that is often the expected return of a diversified portfolio (roughly 6–8%); a business usually uses its weighted average cost of capital. A higher rate makes future dollars worth less today.

What is the difference between present value and net present value?

Present value discounts one future amount or a stream of equal payments to today. Net present value (NPV) does this for an irregular series of cash flows and subtracts the upfront cost, producing one number that is positive when a project adds value.

Why is a dollar today worth more than a dollar tomorrow?

A dollar today can be invested and earn a return, inflation eats into the buying power of future dollars, and any promised future payment carries some risk of not arriving. Those three forces give money its time value.

Related Calculators

Compound Interest — the FV case with a friendlier, savings-focused interface.
Inflation Calculator — discounting driven purely by rising prices.
Real ROI — turn a nominal return into an inflation- and tax-adjusted one.