Present Value of Future Amount Calculator

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This calculator computes the present value of an amount 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.

Example

An individual is offered $2,000 that she will be received in seven years. What is it worth in today's dollars if she could 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.

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