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What is the Present Value Calculator?
A Present Value (PV) calculator determines the current worth of a future sum of money or stream of cash flows given a specified rate of return.
How to Use This Calculator
1
Enter the future amount you expect to receive.
2
Input the discount rate (interest rate).
3
Specify the number of years until payment.
4
Click 'Calculate' to see what that future amount is worth today.
Example Calculation
$10,000 in 10 years at 5% discount rate
Receiving $10,000 in 10 years with a 5% discount rate is equivalent to having approximately $6,139.13 today.
Frequently Asked Questions
Pro Tips
- Use PV to compare cash flows occurring at different times.
- A higher discount rate reduces the present value.
- Essential for evaluating business investments and pension obligations.