NumberTally Present Value Calculator
A dollar today is worth more than a dollar tomorrow. This calculator discounts a future sum back to today's dollars using your chosen rate and compounding frequency — and can also value a stream of regular payments (an annuity).
Advanced options
Enter a periodic payment to also compute the present value of an annuity (e.g. what a pension paying $1,000/month for 10 years is worth today).
Why discount the future?
Money you receive in the future is worth less than money in hand, because money in hand can be invested and grow. Present value answers: "How much would I need to invest today, at this rate, to end up with that future amount?" It is the foundation of bond pricing, pension valuation, and investment comparison.
The discount rate should reflect your opportunity cost — what you could otherwise earn. A higher rate (or longer wait) shrinks the present value dramatically: $100,000 in 30 years is worth about $17,400 today at 6%, but only $5,700 at 10%.
Lump sum vs annuity
A lump sum is discounted with a single division. An annuity — equal payments each period — is valued by discounting every payment and adding them up, which collapses neatly into the annuity formula. The difference between the annuity's total payments and its present value is the total discount (the "cost of waiting").
Frequently Asked Questions
What discount rate should I use?
Use the return you could earn elsewhere at similar risk — e.g. 4–5% for safe bonds, 7–10% for stock-market-like risk. For personal decisions like "take the lump sum or the pension?", many planners use 5–6%.
How does compounding frequency change the answer?
More frequent compounding slightly lowers present value, because money grows faster and you need less today. The effect is small: on 10 years at 6%, monthly vs annual compounding changes the answer by under 1.5%.
Is present value the same as "today's purchasing power"?
Related but different. Purchasing power uses the inflation rate as the discount rate. Investment present value uses your expected return. Both use the same math.
Why is a lottery lump sum so much smaller than the advertised jackpot?
The advertised jackpot is the sum of 30 years of annuity payments. The lump sum is its present value — discounted at current interest rates — which is typically 45–55% of the headline number.
Can present value be more than future value?
Only with a negative discount rate (deflation). With any positive rate, present value is always less than future value — the longer the wait or the higher the rate, the bigger the gap.