Using the Present Value Calculator
The discount rate represents the return or valuation assumption used to bring future money back to today. A higher rate makes a fixed future amount worth less now because more growth is assumed between the two dates.
Worked example
Use the example inputs below to reproduce this result. These are the form's starting values, not recommended targets. Changing your inputs updates your result above; this worked example stays fixed for comparison. Results are rounded for display.
Example inputs
- Future amount
- 10000
- Annual discount rate (%)
- 5
- Years
- 10
Example result
- Present value
- 6,139.13
Method and assumptions
PV = future value / (1 + annual rate)^years.
Separate contributions from growth
An ending balance can grow because you put more money in, because the assumed return is higher, or because the money has more time to compound. Those are different effects. Keep the contribution schedule consistent when comparing rates, and distinguish a mathematical projection from a return that is contractually guaranteed. Fees and taxes need their own assumptions.
Common question
Why does present value fall when the waiting period increases?
At a positive rate, money invested today has more time to grow. A smaller amount today can therefore reach the same future target over a longer period.
Guide updated .