Calculate the Present Value and Present Value Interest Factor ( PVIF ) for a future value return. This basic present value calculator compounds interest daily, monthly, or yearly.
The present value formula PV = FV/(1+i)^n states that present value is equal to the future value divided by the sum of 1 plus interest rate per period raised to the number of time periods.
When using this present value formula is important that your time period, interest rate, and compounding frequency are all in the same time unit. For example, if compounding occurs monthly the number of time periods should be the number of months of investment, and the interest rate should be converted to a monthly interest rate rather than yearly.
For more advanced present value calculations see our other present value calculators. See the Present Value of a Dollar calculator to create a table of PVIF values.
Number of Years Use whole numbers or decimals for partial periods such as months, so for 7 years and 6 months you would input 7.5 years Interest Rate (I) • The nominal interest rate or stated rate as a percentage • i = I/100 is the interest rate as a decimal Compounding Select daily, monthly or yearly compounding Future Value (FV) Future value of a sum of money Present Value (PV) The result of the PV calculation is the present value of any future value sum PVIF • The Present Value Interest Factor includes time period, interest rate and compounding frequency. You can apply this factor to other future value amounts to find the present value with the same length of investment, interest and compounding rate. • PVIF = 1 / (1+i) n • Multiply any FV by PVIF to get a present value using the same length of investment at the same interest rate.
The default calculation above asks what is the present value of a future value amount of $15,000 invested for 3.5 years, compounded monthly at an annual interest rate of 5.25%.