How to use it
- Pick present value, future value, annuity or NPV/IRR.
- Enter the amount or the cash flows.
- Enter the interest or discount rate and the number of years.
- Read the result and the discount or growth factor.
Time value of money in one place
A dollar today is worth more than a dollar in ten years, because today's dollar can be invested. This calculator covers the four standard time value of money questions:
- Present value (PV): what is a future amount worth today?
- Future value (FV): what will today's amount grow to?
- Annuity present value: what is a series of equal yearly payments worth today?
- NPV and IRR: is an investment with uneven cash flows worth it?
Everything runs in your browser. The results are estimates for planning and are not financial advice.
Formulas and examples
Future value: FV = PV × (1 + r/m)^(m × n) Present value: PV = FV / (1 + r/m)^(m × n)
where r is the annual rate, m the compounding periods per year and n the number of years.
- $10,000 invested at 5% compounded annually for 10 years grows to $16,288.95.
- $10,000 received in 10 years, discounted at 5%, is worth $6,139.13 today. The discount factor is 0.6139.
Annuity: receiving $1,000 at the end of each year for 10 years, discounted at 5%, is worth $7,721.73 today, even though the payments add up to $10,000.
NPV and IRR
Net present value discounts every cash flow to today and adds them up. Enter today's investment as a negative number, followed by each year's cash flow, separated by semicolons.
Example: invest $10,000 today and receive $3,000, $4,000 and $5,000 over the next three years. At a 5% required return:
| Year | Cash flow | Present value |
|---|---|---|
| 0 | −$10,000 | −$10,000.00 |
| 1 | $3,000 | $2,857.14 |
| 2 | $4,000 | $3,628.12 |
| 3 | $5,000 | $4,319.19 |
| NPV | $804.45 |
A positive NPV means the investment beats the required return. The internal rate of return is the discount rate that makes NPV exactly zero; here it is about 8.9%.
Choosing a discount rate
The discount rate is the return you could get elsewhere with similar risk. For a personal decision, that might be a savings or CD rate; for a business project, it is often the company's cost of capital or a target return. A higher rate makes future money worth less today.
Small changes in the rate have large effects over long periods, so try a range. Use the compound interest calculator for regular monthly savings and the ROI calculator for a simple return on a past investment.
Where present value is used
- Lottery and settlements: compare a lump sum with annual payments by discounting the payments to today.
- Pensions: decide between a lump-sum payout and monthly benefits.
- Business decisions: rank projects by NPV instead of by total profit.
- Bonds: a bond's price is the present value of its coupons and face value at the market interest rate.
- Personal goals: find how much to set aside today for a known future expense, such as $20,000 for college in 12 years.
In each case the key question is the same: what rate could you earn on the money in the meantime? The answer sets the discount rate.
Frequently asked questions
What is present value?
The value today of money you will receive in the future, discounted at an interest rate that reflects what you could earn meanwhile.
What is the difference between NPV and IRR?
NPV is a dollar amount at your chosen discount rate. IRR is the rate at which the NPV equals zero.
How do I enter cash flows?
Separate them with semicolons, starting with today's amount (usually negative for an investment), then one value per year.
Are annuity payments at the start or end of the year?
At the end of each year, which is the standard ordinary annuity.
Why can IRR not be calculated sometimes?
If cash flows never change sign or change sign several times, there may be no unique IRR.
Last updated: November 12, 2026