ConvertOnlinePresent Value Calculator for Lump Sums and Payments
Report source: https://convertonline.org/calculators/present-value-calculator
Discount a future amount and an optional payment stream into today’s dollars. Keep the rate, payment, and number of periods on the same period basis.
Present Value Calculator
Total present value
Calculation schedule
| Period | Cash flow | Present value | Cumulative value |
|---|
Present Value Calculator formula
PV of a lump sum = FV ÷ (1 + r)ⁿ. PV of end-of-period payments = payment × [1 − (1 + r)⁻ⁿ] ÷ r.
Use the same period for the rate, payment interval, and number of periods. A monthly rate requires monthly payments and a count of months.
Assumptions and limitations
- The discount rate is constant for every period.
- Payments are equal and occur at the selected beginning or end of each period.
- Taxes, fees, inflation, and uncertainty are excluded.
Worked example
Example: future amount plus five payments
Discount a $10,000 future lump sum and five $1,000 end-of-period payments at 5% per period.
The lump sum is worth about $7,835.26 today and the payment stream about $4,329.48, for a total present value near $12,164.74.
Frequently asked questions
What does present value show?
It estimates what a future amount or payment stream is worth today at the selected discount rate.
Why must inputs use the same period?
The formula applies one rate to each payment period. Mixing annual rates with monthly periods produces an invalid comparison.
How does beginning payment timing change PV?
Each payment is discounted for one fewer period, so beginning-of-period payments have a higher present value.
This calculator provides an estimate for planning and education. Actual cash flows, rates, taxes, fees, inflation, and investment outcomes may differ.