Present Value of a Lump Sum Calculator
Discount a single future amount back to today’s money — see what a lump sum you receive later is really worth now.
How it works
PV = FV ÷ (1 + r)^n
Present value answers a simple question: how much is a future payment worth in today’s dollars? Because money can be invested to earn a return, a dollar tomorrow is worth less than a dollar today, so future amounts are divided by a growth factor of (1 + r) raised to the number of years. The higher the discount rate or the longer the wait, the smaller the present value.
Worked example
A $10,000 payout due in 10 years, discounted at 6% a year, is worth 10,000 ÷ 1.06^10 = 10,000 ÷ 1.7908 = $5,583.95 today. Nearly $4,416 of the headline amount is eroded purely by the time you have to wait for it.
Frequently asked questions
What discount rate should I use?
Use the return you could realistically earn on money of similar risk — often your required rate of return or opportunity cost of capital. A higher rate reflects more risk or better alternatives and produces a lower present value.
How is this different from a present value of an annuity?
This calculator discounts one single future amount. An annuity present value discounts a stream of equal payments, so it sums many discounted cash flows rather than one.
Why does present value fall as years increase?
Discounting compounds: each extra year multiplies the divisor by another (1 + r). Waiting longer means the future dollar is divided more times, shrinking what it is worth today.
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Educational estimate, not investment advice.