Present Value Calculator
Compare future payments with a lump sum today at your discount rate.
Model the payments
| Payment | Years from valuation | Cash flow | Present value |
|---|---|---|---|
| Payment 1 | 1 | $10,000.00 | $9,523.81 |
| Payment 2 | 2 | $10,000.00 | $9,070.29 |
| Payment 3 | 3 | $10,000.00 | $8,638.38 |
| Payment 4 | 4 | $10,000.00 | $8,227.02 |
| Payment 5 | 5 | $10,000.00 | $7,835.26 |
| Payment 6 | 6 | $10,000.00 | $7,462.15 |
| Payment 7 | 7 | $10,000.00 | $7,106.81 |
| Payment 8 | 8 | $10,000.00 | $6,768.39 |
| Payment 9 | 9 | $10,000.00 | $6,446.09 |
| Payment 10 | 10 | $10,000.00 | $6,139.13 |
Discount a Future Amount
YYYY-MM-DD,signed amount. 500 rows max, 2 decimals max. No currency signs or separators.
Present value is a future payment discounted to the valuation date. For a single payment, PV = FV / (1 + r)^t. FV is the future amount, r the effective annual discount rate and t the years until payment.
A hypothetical $12,100 payment in two years is worth $10,000 today at 10%. At 5%, the same payment is worth $10,975. A higher positive discount rate reduces present value.
An annuity is a series of equal payments at regular intervals. The calculator discounts each payment separately and adds the results. Use the dated schedule below for irregular amounts or payment dates.
Compare Payment Timing and Terms
Beginning-period payments arrive one period earlier than end-period payments. At a positive discount rate, earlier payments have a higher present value.
The default $10,000 yearly payment for ten years has a present value of $77,217 at 5% with year-end payments. Year-beginning payments produce $81,078. At a zero discount rate, both equal the $100,000 undiscounted total.
Monthly payments use one-twelfth of a year per period. The equivalent monthly rate is (1 + r)^(1/12) − 1. The annual input is an effective rate, so it is not divided by twelve.
Microsoft’s PV documentation explains the distinction between beginning-period and end-period payments. Match both the rate basis and the payment timing when comparing spreadsheet results.
Single payments fall at the end of the entered term. Frequency and timing apply to regular payments. Regular terms must contain a whole number of payments.
Interpret the Lump-Sum Equivalent
The lump-sum equivalent depends on the payment stream and discount rate you enter. Keep those assumptions separate from payment amounts and dates established by bank statements, contracts or other evidence.
The discount effect is the undiscounted total less present value. It measures the effect of your chosen rate and timing. It does not measure money missing from an estate or establish a recoverable loss.
Use a consistent basis for inflation. Nominal payments need a nominal discount rate, while payments expressed in today’s purchasing power need a compatible real rate. Tax and uncertain receipts need separate professional analysis.
The business valuation guide for divorce matters explains where assumptions and expert valuation evidence affect a property matter.
Calculate Net Present Value
Net present value subtracts the initial outlay from discounted future cash flows. Enter receipts as positive amounts and later payments as negative amounts. The initial outlay is a positive cost deducted once at the valuation date.
The dated schedule uses actual elapsed days divided by 365, including across leap years. Each row uses PV = cash flow / (1 + r)^(days / 365). This matches the day-count convention in Microsoft’s XNPV documentation.
| Payment date | Days from valuation | Cash flow | Present value |
|---|---|---|---|
| 1 Jan 2027 | 365 | $5,500.00 | $5,000.00 |
| 1 Jan 2028 | 730 | $5,500.00 | $4,545.45 |
Every payment appears in the schedule. Worksheet CSV downloads include numeric inputs, full-precision year fractions and a present-value formula for each row. The final formula deducts the initial outlay once.
Schedule rows show cents and totals show whole dollars. Both use unrounded values, so the rounded rows can add up to slightly more or less than a total. A positive net value means discounted receipts exceed the entered outlay under your assumptions.
Value a Life-Interest Scenario
Select life-interest income scenario and enter the income per payment, payment frequency and horizon. The result is the present value of that income over the entered term.
If you enter a life-expectancy assumption, the calculator treats it as a fixed horizon with every payment received. It does not infer survival probabilities from age or calculate an actuarial entitlement.
For example, $10,000 at each year’s end over an entered ten-year horizon produces $77,217 at 5%. A legal life interest can depend on the governing instrument, property rights and contingencies beyond that cash-flow scenario.
Record the basis for the horizon and compare alternative rates before using the scenario in advice or negotiations. Obtain the legal or actuarial valuation the matter requires separately.
Life-interest mode uses your entered horizon. It applies no mortality probability or actuarial table. Enter expected income per payment and the horizon you want to examine.
Discounting Future Economic Loss
The future economic loss calculator discounts your entered payment stream to a lump sum. Select Future economic loss scenario above, then enter the loss per payment, term and effective annual discount rate. Choose the payment frequency and whether each payment falls at the beginning or end of its period.
For a hypothetical loss of $10,000 at each year’s end for ten years, a 5% discount rate produces $77,217 today. Beginning-year payments produce $81,078. At 0%, both equal $100,000. The payment schedule shows each loss amount, its timing and its discounted value. Download the present-value worksheet to retain the formulas.
For changing amounts or irregular dates, use the dated cash-flow section with an initial outlay of zero. Enter each future loss as a positive amount. Its present value is the discounted lump sum for those dates.
You must establish the future-loss amounts and period from the matter’s evidence and assumptions about future earnings. Establish legal entitlement and any statutory discount rules separately. The scenario applies your entered rate and timing without selecting a jurisdiction’s prescribed rate or deciding recoverable damages. Record tax, inflation and other adjustments in the payment assumptions or analyse them separately.