Present Value Calculator

# Net Present Value Calculator

The Net Present value, also called *present discounted value. *The Net present value is equal to Future value divided 1 numbers of value added to interest rate (%).

**Formula us,**

PV=FV/(1+r)

**Let us consider,**

- PV = present value
- FV = future value
- r = interest rate

The present value for more than one period of time, you need to raise the **(1+r)** by the number of period.

n = number of periods.

calculate the present value

If you read the previous paragraph you already know that to estimate present value you need to:

- Determine the future value. In our example let’s make it $ 200
- Determine a periodic rate of interest. Let’s say 7%
- Determine the number of periods. Let’s make it 2 years.
- Divide the future value by (1+rate of interest)^periods

In our example it will look like this:

PV=FV/(1+r)

200$/(1+0.07)2 = 200.14$

The answer is Present value = 200.14$