Present Value Calculator Online

Present Value Calculator

Present Value Calculator

Present value calculator is  the current value of a stream of cash flows or a future payment  rate of return. Present value is equal  to Future Value divided to number value  1 added Interest rate(%).

Formula Us,

PV=FV/(1+r)

let us consider,

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

It applies compound interest, which means that interest increases exponentially over subsequent periods.

 calculate present value

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

  1. Determine the future value. In our example let’s make it $200
  2. Determine a periodic rate of interest. Let’s say 7%
  3. Determine the number of periods. Let’s make it 2year
  4. 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

The answer is present value = 174.69$

 

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