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Present Value Formula:
Present Value = Future Value * (1 + Interest Rate Per Period)^-Number of Periods
Present Value Definition
The Present Value Calculator will instantly calculate the present value of any future lump sum if you enter in the future value, the interest rate per period (also called the discount rate), and the number of periods. The present value calculation is a time value of money calculation that takes into account what many economists call the “Time Preference“. Time Preference is simply that everything else being equal a rational individual would rather have X amount of money today rather than X amount of money at some point in the future. Inflation and its effect on decreasing the purchasing power of money over time are key considerations underlying any present value calculation. Also, check out the Present Value Annuity Calculator.
How to Calculate Present Value
Let's be honest - sometimes the best present value calculator is the one that is easy to use and doesn't require us to even know what the present value formula is in the first place! But if you want to know the exact formula for calculating present value then please check out the "Formula" box above.
Add a Free Present Value Calculator Widget to Your Site!
You can get a free online present value calculator for your website and you don't even have to download the present value calculator - you can just copy and paste! The present value calculator exactly as you see it above is 100% free for you to use. If you want to customize the colors, size, and more to better fit your site, then pricing starts at just $29.99 for a one time purchase. Click the "Customize" button above to learn more!