Present Value and Future Value Calculator
Compare money today with money in the future using a yearly rate.
The time value of money
Money today is worth more than the same amount later, because today’s money can earn interest. Future value tells you what an amount grows to. Present value works backwards and tells you what a future amount is worth now, using a discount rate.
Example
1,000 invested at 5% a year grows to about 1,628.89 in 10 years. In reverse, a promise of 1,000 in 10 years is worth about 613.91 today at the same 5% rate.
Where it is used
Comparing a lump sum now with payments later, valuing a future payout, or checking whether an investment’s return beats a benchmark rate. The rate you pick matters a lot, so test a few. This version compounds once a year.
Frequently asked questions
What is a discount rate?
It is the yearly rate you use to bring a future amount back to today's value. It often reflects the return you could earn elsewhere.
Does a higher rate raise or lower present value?
Lower. The higher the discount rate, the less a future amount is worth today.
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