See what a future cash payout is worth in today's dollars at any discount rate.
Free present value planner that discounts a one-time future payout or a recurring annuity stream back to today's dollars at any discount rate and compounding frequency.
Direct answers to the most common questions, in plain language. Skim if you're in a hurry; dig deeper below.
The value today of a future cash payment, discounted at a chosen rate.
Present value (PV) is what a future amount of money is worth in today's dollars after accounting for the opportunity cost of waiting. The bigger the discount rate or the longer the wait, the smaller the present value.
PV = FV / (1 + r/n)^(n·t).
Divide the future value by one plus the periodic rate, raised to the number of compounding periods. For a $10,000 payout in 10 years at a 6% annual discount rate compounded monthly, PV ≈ $5,496.
Use your realistic opportunity cost, often 4–10%.
Pick the return you could reasonably earn on a comparable-risk investment. Treasury yields for safe cash flows, a blended equity/bond rate for long-term planning, or your hurdle rate for business decisions. Inflation alone is too low for most cases.
Annuities are a stream of payments, each discounted on its own.
A lump sum is one cash flow at one future date. An annuity is a series of equal payments over time. Each payment in the annuity gets discounted by how far in the future it falls, and then they are summed.
The mechanics in short answers. No jargon, no upsell.
A dollar in 10 years is not a dollar today. You could have invested today's dollar, so future dollars have to be discounted to reflect that opportunity cost.
Pick the return you could earn on a comparable investment. A higher rate means future cash is worth less today; a lower rate means it is worth more.
Monthly compounding produces a slightly lower present value than annual compounding for the same nominal rate, because the rate is effectively higher over the year.
For a recurring payment, every individual payout is discounted by its own time distance, then added up. The formula collapses to a closed-form expression for equal payments.
Worked example: At the defaults ($100,000 received 15 years from now, discounted at 6% compounded annually), the present value is about $41,727: that future check is worth less than half its face value today.
Assumes one constant discount rate for the whole period and end-of-period payments in annuity mode (an ordinary annuity). All math runs locally in your browser.
Designed so anyone can model their situation in under a minute, with or without a finance background.
Translate any future payout (lottery, settlement, pension) back into today's dollars so the choice is honest.
Toggle between a one-time future payment and a recurring annuity stream without redoing the math.
A small change in the discount rate moves PV a lot. The chart shows the whole curve, not just one point.
Annual, semi-annual, quarterly, or monthly. Match the convention your offer uses.
Everything runs in your browser. Numbers never leave the page.
See exactly how much a 30-year promise is really worth today, and how time crushes nominal numbers.
Everything you might ask before, during, or after using this tool.
Present value answers the question, "How much money would I need today, invested at my discount rate, to grow into the future amount?" It lets you compare future cash flows against money you have in hand right now.
A higher discount rate lowers the present value of any future cash flow, because you assume your money could compound faster elsewhere. Lower discount rates make future cash worth more today.
PV discounts a single future cash flow (or a stream) back to today. NPV (net present value) also subtracts the initial investment, giving the net gain or loss in today's dollars. NPV is PV with the upfront cost netted out.
Use the convention that matches your offer or comparison. Bonds and mortgages typically compound monthly or semi-annually. Long-range planning often uses annual for simplicity. The output difference is small but real.
Indirectly. If you discount nominal cash flows, use a nominal discount rate that already includes inflation. If you discount real (inflation-adjusted) cash flows, use a real discount rate. Don't mix the two.
A practical default is your expected long-run after-tax investment return, often 5–8% for a balanced portfolio. For risk-free cash flows, a current Treasury yield is more appropriate. Be consistent across the comparisons you make.
Only if the discount rate is negative. With any positive discount rate, PV is always less than FV for a future cash flow.
Calculate the PV of the annuity stream at a realistic discount rate, then compare it to the lump-sum offer. The lump sum is usually smaller than the headline annuity total, but often larger than the annuity's present value at typical discount rates.
Other Lazysmirk tools that pair well with this one.
See what your money will be worth years from now. Model lump sums, monthly contributions, and compound growth with one clean calculator.
Calculate compound interest with monthly contributions, see the growth curve, and find out why Einstein called it the eighth wonder of the world.
Calculate the Compound Annual Growth Rate of any investment. Compare against S&P 500, bonds, and inflation. Project forward and see the Rule of 72 in action.
Calculate the inflation-adjusted value of any amount of money across years. See how purchasing power changes over time using CPI data.
Calculate how much you need to retire, when you can retire, and whether your current savings rate will get you there. Inflation-adjusted, with Social Security.
Money you have today can earn returns. Money promised in the future cannot, until it shows up. That gap (what your dollar could have done in the meantime) is the time value of money.
Present value puts a number on that gap. It tells you, given a discount rate that represents your opportunity cost, what a future cash payment is actually worth in today's dollars.
The discount rate is the single biggest lever in any PV calculation. For risk-free future cash (a Treasury coupon, a government settlement), use a current Treasury yield with a matching maturity.
For personal financial planning, use your realistic expected after-tax return on a comparable-risk portfolio, usually 5–8% over long horizons. For business decisions, use your weighted average cost of capital or a hurdle rate. The wrong move is to use inflation alone, which understates the real opportunity cost of waiting.
Present value is the discounted value of one or more future cash flows. Net present value subtracts the initial investment from that discounted total.
For a project that costs $50,000 today and pays back $80,000 in five years, the PV of $80,000 might be $62,000 at a 5% discount rate, and the NPV is then $62,000 − $50,000 = $12,000. PV says "this is worth $62k today." NPV says "you net $12k by going forward."
When you choose between a lump sum and an annuity (lottery winnings, pension buyouts, structured settlements), the comparison is never the headline number. It's always the present value at your discount rate.
A $1,000,000 lump sum vs a $50,000-per-year annuity for 25 years sounds like the annuity wins ($1.25M total). But at a 5% discount rate, the annuity's PV is only around $705,000. The lump sum is the better deal, by a lot, unless you have strong reasons to value certainty over flexibility.
Two short notes worth reading before you trust any number on this page.
Your loan amount, rate, and prepayment inputs never leave your device. No accounts, no cookies on your numbers, no analytics on the values you type. Disconnect from the internet and it still works.
We are not a bank, NBFC, advisor, broker, or distributor of any financial product. The numbers shown here are estimates for educational purposes only, based on the inputs you provide.
Results are not financial, legal, or tax advice. Please consult a qualified professional before any decision about your loan, investments, or personal finances. Actual loan terms and charges depend on your bank and individual circumstances.
