What is future money worth today?
Discount one future amount or a series of equal payments. Add an initial cost to calculate net present value, or compare purchasing power using a separate inflation assumption.
Discounting schedule
| Payment / group | Years from today | Cash received | Present value | Cumulative PV |
|---|
Understanding present value
Present value converts future receipts into an equivalent amount today using your chosen discount rate. A higher positive rate reduces present value; at a zero rate, present value equals the sum of receipts. A negative rate can make present value greater than the future amount.
The calculation
For one amount: PV = future amount ÷ (1 + annual rate)years. Rates are entered as percentages and converted to decimals in the calculation.
For recurring payments, each receipt is discounted separately and the results are added. With F payments per year, payment k arrives at k/F years for end-of-period timing, or (k − 1)/F years for beginning-of-period timing. Beginning-of-period payments include a payment today.
Present value versus net present value
NPV equals the present value of your receipts minus the initial cost paid today. A positive NPV means modeled receipts exceed that cost after discounting at your chosen rate. It does not guarantee a profit or account for cash flows you did not enter.
Inflation and schedule assumptions
The optional inflation comparison discounts receipts using only the inflation rate. It is shown separately and does not apply a second discount to the main result. It excludes the initial cost.
Payments are equal and occur at exact intervals. Annual groups collect each consecutive set of 12 monthly, 4 quarterly or 1 annual payments; a final group can contain fewer payments. These are groups from the start, not calendar years. With beginning-of-period timing, the first group includes the receipt today.
Calculations use unrounded values, with displayed amounts rounded to two decimal places. Taxes, fees, changing rates and uncertain payments are excluded. Results are estimates based on your inputs.