Present Value of Future Amount
You can use this calculator to calculate the present value of an amount to be received in the future. The basic principle is that the same amount of money is more valuable today than it will be in the future because today's dollars can be invested to make more money.
To open this calculator, click Calculators in the toolbar, and then click Other Investment > Present Value of Future Amount in the left panel.
You can export the data as a PDF file or clear all data that you entered. For more information, see Financial calculators.
Example
An individual is offered $2,000 that she will receive in seven years. What is it worth in today's dollars if she can earn 10% on investments?
Field | Input |
---|---|
Future amount | $2,000 |
Years of discounting | 7 |
Annual discount rate | 10% |
In this example, $2,000 seven years from today is worth $1,026.32 in today's dollars.
Note: The discount rate is a rate of return that the individual could earn on today's dollars.
Internal notes
25
Contact us
Call 800-968-0600
Was this article helpful?
Thank you for the feedback!