Please enter your values in the Present Value (PV) Calculator. Example is included below.
How to use the Present Value (PV) Calculator
Let’s review a simple example in order to see how to use the Present Value calculator. The goal is to derive the PV given the information below:
- Future Value (FV) = 1000
- Interest Rate in % (r) = 4
- Number of periods (n) = 7
To start, enter the values in the calculator, and then click on the Calculate Present Value (PV) button:
You would then get the Present Value of 759.9178.
How to Manually Derive the Present Value
You may use the following formula to calculate the Present Value:
FV Present Value (PV) = (1 + r)n
- FV = Future Value
- r = Interest Rate
- n = Number of Periods
For example, let’s say that you want to calculate the Present Value, given the following information:
- FV = 1000
- r = 4% (or 0.04)
- n = 7
Based on the formula above, the Present Value is therefore:
FV 1000 Present Value (PV) = (1 + r)n = (1 + 0.04)7 = 759.9178
You’ll then get the Present Value of 759.9178.