Present Value Calculator

Calculate the present value of a future lumpsum amount given a discount rate and the number of years until you receive it.

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Enter a future value, discount rate, and number of years to calculate its present value using PV = FV / (1 + r)^n — how much that future amount is worth today.
₹
The lumpsum amount you expect to receive in the future.
%
The annual discount rate reflecting the time value of money (often your expected rate of return).
The number of years until the future amount is received.

Your result

₹68,058.32

Present value

Total discount₹31,941.68

AI explanation

Formula

PV = FV / (1 + r/100)^Years

Worked example

₹1,00,000 received in 5 years, discounted at 8%

Worked example: ₹1,00,000 received in 5 years, discounted at 8%
FieldValue
Future value (amount you'll receive)100000
Discount rate (per annum)8
Number of years5
Present value68058.32
Total discount31941.68

Assumptions

  • Assumes annual discounting at a fixed rate for the entire period.
  • Models a single future lumpsum, not a stream of periodic cash flows (see Net Present Value Calculator for multi-period cash flow analysis).

Frequently asked questions

Why is a future amount worth less today?

Money available today can be invested to earn a return, so a rupee today is worth more than a rupee received in the future. Present value quantifies exactly how much less, based on your chosen discount rate.

What discount rate should I use?

A common approach is to use your expected rate of return from an alternative investment of similar risk, or a benchmark rate such as a fixed deposit or government bond yield.

How is this different from the Future Value Calculator?

Future Value projects a present amount forward to a future date. Present Value works in reverse — discounting a known future amount back to today's equivalent value.

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Future Value CalculatorCAGR CalculatorCompound Interest Calculator

Related articles

Finance1 min read

How the Present Value of a Future Amount Is Calculated

A future amount's present value is that amount divided by (1 + discount rate)^years — the exact reverse of compounding, showing what a future sum is actually worth in today's money.

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Finance1 min read

Why Discounting a Future Value Back Returns the Exact Original Amount

Growing ₹1,00,000 forward 10 years at 8% and then discounting that real future value back 10 years at the same 8% returns exactly ₹1,00,000 — proof that future value and present value are precise mathematical inverses of each other, not just similarly-named concepts.

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Sources

This calculator provides a mathematical estimate for general educational use and does not constitute investment or financial advice.

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