About the Present Value Calculator
What is the Present Value Calculator?
Present value (PV) is today's worth of money you will receive in the future. Because money can earn a return, ₹10 lakh ten years from now is worth much less than ₹10 lakh today.
Enter the future amount, a discount rate (the return you could earn elsewhere, or your cost of capital) and the number of years. The result tells you how much you would need to invest today to reach that amount, and how much of the future value is simply growth.
How to use the Present Value Calculator
- Future Value (INR) (sample: 10,00,000)
- Discount Rate (% per year) (sample: 10)
- Years (sample: 10)
- Press Calculate Present Value (results also refresh as you type). The result card shows the Present Value, along with Future Value, Discounted Difference and Discount Rate.
Formula used
PV = FV ÷ (1 + r)ⁿ
- FV = the future amount
- r = the annual discount rate
- n = the number of years
Discounting is the reverse of compounding. PV underpins NPV, bond pricing and business valuation.
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Future Value (INR) | 10,00,000 |
| Discount Rate (% per year) | 10 |
| Years | 10 |
| Result | Value |
|---|---|
| Present Value | ₹3,85,543 |
| Future Value | ₹10,00,000 |
| Discounted Difference | ₹6,14,457 |
| Discount Rate | 10% |
Tips for using the Present Value Calculator
- A higher discount rate or a longer period lowers the present value.
- Use your expected investment return as the discount rate for personal goals.
- Compare lump-sum offers (e.g. a settlement now vs. later) using present value.