What is Present Value (PV)?

Present Value discounts future cash flows to today's value using a discount rate. Formula for a single amount: PV = FV ÷ (1 + r/n)^(n·t).

PV vs NPV—what's the difference?

PV is the value of one cash flow. NPV is the sum of PVs of multiple cash flows (inflows and outflows), typically minus the initial investment.

Which discount rate should I use?

Use your opportunity cost or required rate of return. For personal finance, consider post-tax returns and risk level of comparable investments.

Nominal vs real discount rate—how to choose?

Match the rate to your cash flows. Use a nominal rate for nominal cash flows. For inflation-adjusted (real) cash flows, use a real rate: (1+nominal) ≈ (1+real)×(1+inflation).

How do compounding frequencies affect PV?

Higher compounding (monthly vs annual) increases the effective rate and lowers PV. Set n to match the compounding of the instrument.

Present Value Calculator

Future Value

Annual Inflation Rate (%)

Time Period (Years)

Future Value

Present Value

Total Inflation

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