Present value of a future sum: Putting a Future Payment into Today’s Terms
Present value discounts a future amount for the time until it arrives. A higher discount rate reduces the value assigned today to the same future payment.
Use the Present value of a future sum Calculator to enter your own figures and compare the result with the worked example below.
Present value of a future sum formula
PV = FV ÷ (1 + r)^n
Worked example
| Item | Example value |
|---|---|
| Future value | 10000 USD |
| Rate per period | 5 % |
| Number of periods | 10 periods |
| Present value of a future sum | 6,139.132535 USD |
These are illustrative inputs, not current prices, rates or recommended targets. Where a currency is shown, keep all comparable money amounts in the same currency; conversion examples identify the two sides separately.
How to interpret the result
Use a rate per period and count periods on the same basis. The chosen discount rate reflects assumptions, not a guaranteed market valuation.
Related calculations
Method and further reading
The example follows the FinMathly calculator method. For broader background, see Investor.gov: Introduction to investing. The background resource may use jurisdiction-specific terms; it does not replace the assumptions of this calculator.
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