Present Value Calculator: What Is Future Money Worth Today?
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The present value of a future amount is the amount divided by (1 + rate)^years. $50,000 received in 10 years, discounted at 5%, is worth about $30,696 today.
Receiving $50,000 over 10 years is worth about $30,696 today if you could otherwise earn 5.00% a year.
Same lump sum at different waits
| Wait | Worth today |
|---|---|
| 5 years | $39,176 |
| 10 years | $30,696 |
| 15 years | $24,051 |
| 20 years | $18,844 |
Show the steps
- Rate per period: 5.000% ÷ 1 = 5.00000%. Periods: 10.
- Lump sum: $50,000.00 ÷ (1 + r)^n = $30,695.66.
Present value
PV = FV ÷ (1 + r)^n + PMT × (1 − (1 + r)^−n) ÷ r
r = annual rate ÷ periods per year, n = total periods
- A higher discount rate makes future money worth less today.
Estimates for planning and learning, not financial, tax, legal or medical advice. Check figures with your lender, tax preparer or doctor before you act.
About this calculator
A dollar today is worth more than a dollar later, because today’s dollar can earn a return. Present value turns future money into today’s money so you can compare options fairly: a lump sum now versus payments later, a settlement, or a pension buyout.
Enter a future lump sum, a regular payment, or both. The discount rate is the return you could expect from a similar investment.
How to use it
- Enter the lump sum you will receive, if any.
- Enter any regular payment you will receive and how often.
- Enter the discount rate and the number of years.
- Read the present value and how much comes from the lump sum versus the payments.
Choosing a discount rate
Use the return you could earn on a similar-risk investment. A safe rate such as a Treasury yield suits guaranteed payments. A higher rate suits risky ones.
Common uses
- Comparing a lump-sum pension with monthly payments.
- Valuing a structured settlement or lottery annuity.
- Deciding between paying cash now or financing.
Sources
Quick check: test yourself
At 10% a year, what is $5,500 one year from now worth today?
Correct answer: $5,000. $5,500 ÷ 1.10 = $5,000.
If the discount rate rises, the present value of a future payment…
Correct answer: Falls. A higher rate means more growth is possible elsewhere, so the payment is worth less today.
Present value is also called…
Correct answer: Discounted value. You discount a future amount back to today.
Pick an answer for each question.
Common questions
What is present value?
The value today of money you will receive in the future, found by discounting it at a chosen rate.
How do I calculate present value?
Divide the future amount by (1 + r) raised to the number of periods.
What discount rate should I use?
The return you could earn elsewhere on a similar-risk investment.
Why is a dollar today worth more?
Because it can be invested, and because of inflation and risk.
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