ToolBox CS
Warning
Product support for ToolBox CS ended on October 31, 2022.
Help & How-To Center content for ToolBox CS may be outdated and is used at your own risk.
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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