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Present Value Calculator

Discount future lump sums, annuities, perpetuities, or growing dividend streams to find their net worth in today\'s currency.

Present Discounted Value (PV)
$203,186

Interest Discount Savings: $36,814

Total Nominal Worth$240,000
Discount Rate7%
Discount Factor0.8466

PV Specifications

Discounted Cash Flow Chart
Projections & Actions
Valuation SummaryThe Present Value of this cash flow stream discounted at 7% annual rate is $203,186. This represents a discount savings of $36,814 compared to nominal flows.
Discounting Ledger
PeriodNominal Cash FlowDiscount FactorPresent ValueCumulative Present Value
Period 1$4,0000.99420$4,000$4,000
Period 2$4,0000.98843$3,977$7,977
Period 3$4,0000.98270$3,954$11,931
Period 4$4,0000.97700$3,931$15,861
Period 5$4,0000.97134$3,908$19,769
Period 6$4,0000.96570$3,885$23,655
Period 7$4,0000.96010$3,863$27,518
Period 8$4,0000.95454$3,840$31,358
Period 9$4,0000.94900$3,818$35,176
Period 10$4,0000.94349$3,796$38,972
Period 11$4,0000.93802$3,774$42,746
Period 12$4,0000.93258$3,752$46,498
Period 13$4,0000.92717$3,730$50,228
Period 14$4,0000.92180$3,709$53,937
Period 15$4,0000.91645$3,687$57,624
Period 16$4,0000.91114$3,666$61,290
Period 17$4,0000.90585$3,645$64,935
Period 18$4,0000.90060$3,623$68,558
Period 19$4,0000.89538$3,602$72,161
Period 20$4,0000.89018$3,582$75,742
Period 21$4,0000.88502$3,561$79,303
Period 22$4,0000.87989$3,540$82,843
Period 23$4,0000.87479$3,520$86,362
Period 24$4,0000.86971$3,499$89,862
Period 25$4,0000.86467$3,479$93,340
Period 26$4,0000.85965$3,459$96,799
Period 27$4,0000.85467$3,439$100,238
Period 28$4,0000.84971$3,419$103,656
Period 29$4,0000.84478$3,399$107,055
Period 30$4,0000.83988$3,379$110,434
Period 31$4,0000.83501$3,360$113,794
Period 32$4,0000.83017$3,340$117,134
Period 33$4,0000.82536$3,321$120,455
Period 34$4,0000.82057$3,301$123,756
Period 35$4,0000.81581$3,282$127,038
Period 36$4,0000.81108$3,263$130,302
Period 37$4,0000.80637$3,244$133,546
Period 38$4,0000.80170$3,226$136,771
Period 39$4,0000.79705$3,207$139,978
Period 40$4,0000.79243$3,188$143,166
Period 41$4,0000.78783$3,170$146,336
Period 42$4,0000.78326$3,151$149,487
Period 43$4,0000.77872$3,133$152,620
Period 44$4,0000.77420$3,115$155,735
Period 45$4,0000.76971$3,097$158,832
Period 46$4,0000.76525$3,079$161,911
Period 47$4,0000.76081$3,061$164,972
Period 48$4,0000.75640$3,043$168,015
Period 49$4,0000.75201$3,026$171,041
Period 50$4,0000.74765$3,008$174,049
Period 51$4,0000.74331$2,991$177,039
Period 52$4,0000.73900$2,973$180,013
Period 53$4,0000.73472$2,956$182,969
Period 54$4,0000.73046$2,939$185,908
Period 55$4,0000.72622$2,922$188,829
Period 56$4,0000.72201$2,905$191,734
Period 57$4,0000.71782$2,888$194,622
Period 58$4,0000.71366$2,871$197,494
Period 59$4,0000.70952$2,855$200,348
Period 60$4,0000.70540$2,838$203,186

The Concept of Present Value Discounting

Present value discounting is based on the core financial principle that a dollar today is worth more than a dollar in the future. This is because money in hand can earn compound interest, and inflation erodes future purchasing power.

How Discounting Works

To discount a future sum back to the present, we divide it by the compound rate factor:

PV = FV / (1 + r)^n

Where FV is the future value, r is the discount rate, and n is the compounding periods.

Infinite Cash Flows (Perpetuities)

For investments that have no maturity date, such as perpetuity trusts, we compute their capitalized value by dividing the periodic payment by the periodic discount rate:

PV = PMT / r

If the payments grow at a constant rate $g$, we employ the Gordon Growth Model: $PV = PMT / (r - g)$.

How Present Value Calculator | PV & Discounted Cash Flow Solver Works

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Frequently Asked Questions

Can this calculate PV for any cash stream?

Yes. Calculate PV for lump sums, annuities, perpetuities, and growing cash flows.