This calculator provides the user with the present value of an investment. That is to say, the value of the investment stated in today's dollars. (Also known as current or nominal dollars, since the calculator does not adjust for inflation.) The calculator only requires three inputs to calculate the present value: the future value of the investment, the total number of time periods, and the discount rate.
The variables used in our online calculator are defined in detail below, including how to interpret the results.
This is the future value of the investment. For example, if you want to know the value of $100,000 received 10 years from now, then the future value would be $100,000.
This is the number of payment periods for the investment. For example, if you're going to receive $100,000 in ten years, then the Number of Time Periods would be 10. The time period used in this section of the calculator must be the same time period used for the Discount Rate.
This is the rate at which you want to discount the value of the investment received in the future to its present value. For example, if you want to discount the future value by 10% each time period, then the discount rate is 10%. The time used for the Discount Rate value (10% per year) must be consistent with the Number of Time Periods (years).
This is the present value of the investment, which takes into consideration the time value of money. This value discounts the Future Value by the Discount Rate (interest rate) specified. For example, $100,000 received 10 years from now, discounted at a rate of 7%, would have a present value of $50,834.93.
Present Value Calculator - Copyright © 2010 - 2015 Money-Zine.com (Last Reviewed on January 29, 2015)
Disclaimer: These online calculators are made available and meant to be used as a screening tool for the investor. The accuracy of these calculations is not guaranteed nor is its applicability to your individual circumstances. You should always obtain personal advice from qualified professionals.