Present Value Calculator
Find how much you need today to reach a future amount, discounted at a chosen annual rate.
How it works
PV = FV ÷ (1 + r)^t
Present value is future value in reverse: it discounts a future amount back to what it is worth today, because money you have now can be invested to grow. FV is the future amount, r the annual discount rate (your expected return), and t the number of years. A higher rate or a longer wait means you need less today.
Worked example
To have $20,000 in 10 years at a 6% return, you need $20,000 ÷ 1.06^10 = $20,000 ÷ 1.7908 ≈ $11,168 today; growth supplies the other $8,832.
Frequently asked questions
What discount rate should I use?
Your realistic expected return on the money — often a safe rate for guaranteed goals, or a market return for long-term investing. A higher rate lowers the amount needed today.
Why is present value less than future value?
Because a dollar today can earn returns, so it is worth more than a dollar promised later. Discounting strips out that expected growth.
Where is present value used?
Valuing bonds, comparing a lump sum now against payments later (like lottery or pension choices), and any decision weighing money at different times.
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This is an educational estimate, not financial advice. Confirm figures with your lender, advisor or tax professional.