Present Value Calculator
Calculate the current value of future money or periodic deposits. Determine how much you need to invest today to reach your financial goals tomorrow.
Understanding Present Value
Present value (PV) is the current worth of a future sum of money or stream of cash flows given a specified rate of return. It accounts for the time value of money – the concept that money available today is worth more than the same amount in the future.
Present Value Formula
Where:
PV = Present Value
FV = Future Value
r = Discount Rate
n = Number of periods
Key Applications
- Evaluating investment opportunities
- Mortgage and loan calculations
- Retirement planning
- Comparing financial options
Calculate Present Value
Present Value of Future Amount
Value Comparison
Present Value of Annuity
Payment Value Timeline
Understanding Present Value
The concept of present value is fundamental in finance and helps in making informed decisions about investments, loans, and savings.
Time Value of Money
Money available today is worth more than the same amount in the future due to its potential earning capacity. This core principle means you can invest money today to earn interest over time.
Investment Evaluation
PV calculations help investors determine the fair value of investments. By discounting future cash flows, you can compare different investment opportunities on an equal basis.
Retirement Planning
Calculate how much you need to save today to achieve your retirement goals. PV helps determine the current value of future retirement income needs.
Annuity Present Value Formula
Where:
PV = Present Value of Annuity
P = Periodic Payment
r = Discount Rate per period
n = Number of periods