Present Value Calculator - NPV & Annuity
Calculate the present value of future money using discount rates. Supports single amounts and annuities (ordinary and due). Essential for investment appraisal and bond valuation.
Present Value Calculator
Find today's value of future money
10%
1%25%
10 years
1 year30 years
Present Value Results
Present Value Today
₹3.86 L
at 10% discount rate for 10 years
Future Amount
₹10.00 L
Total Discount
₹6.14 L
Discount Percentage61.4%
Value Growth Over Time
Year 0₹3.86 L
Year 2₹4.67 L
Year 5₹6.21 L
Year 10₹10.00 L
You need to invest ₹3.86 L today to get ₹10.00 L in 10 years.
How to Use the Present Value Calculator
- Choose calculation type — "Single Amount" for a lump sum or "Series of Payments" for annuities.
- Enter the future amount — The money you expect to receive in the future.
- Set the discount rate — The expected rate of return or opportunity cost of capital.
- Enter the time period — Number of years until payment is received.
- View results — See how much that future money is worth today.
Frequently Asked Questions
What is Present Value (PV)?
Present Value is the current worth of a future sum of money given a specified rate of return. It is based on the concept that money available today is worth more than the same amount in the future due to its earning potential. This is known as the Time Value of Money (TVM).
What is the formula for Present Value?
PV = FV / (1 + r)^n, where FV is Future Value, r is the discount rate per period, and n is the number of periods. For an annuity: PV = PMT × [(1 - (1+r)^-n) / r].
What is the discount rate?
The discount rate is the rate of return used to discount future cash flows back to their present value. It reflects the opportunity cost — what you could earn by investing the money elsewhere. Common benchmarks include bank FD rates, inflation rate, or expected equity returns.
What is the difference between ordinary annuity and annuity due?
An ordinary annuity has payments at the end of each period (e.g., bond coupons, loan EMIs). An annuity due has payments at the beginning of each period (e.g., rent, insurance premiums). Annuity due has a slightly higher present value because payments are received earlier.
How is Present Value used in business decisions?
Present Value is fundamental to investment appraisal (NPV analysis), bond pricing, lease valuation, pension obligations, and comparing projects with different cash flow timings. If PV of inflows exceeds PV of outflows, the investment creates value.
What is Net Present Value (NPV)?
NPV is the sum of present values of all cash inflows minus cash outflows. NPV > 0 means the investment is profitable. It is the most widely used capital budgeting technique in corporate finance.
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