Present Value (PV) Calculator
Determine the initial lump sum investment required today to achieve a future financial goal.
Future Goal Details (₹)
The amount you need at the end of the term.
Required Investment Today (PV)
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₹ (Lump Sum)
Investment Breakdown
| Total Interest Earned: | — |
|---|---|
| Total Compounding Periods: | — |
PV: Discounting Future Goals Back to Today
The **Present Value Calculator** uses the compounding interest formula in reverse. It determines how much a sum of money needed in the future (**Future Value**) is worth **today** (Present Value), based on the assumption that you could invest that money and earn interest.
The Present Value Formula
The formula for discounting a lump sum is:
$$PV = \frac{FV}{(1 + \frac{r}{n})^{nt}}$$ Where: $\text{FV}$ = Future Value, $r$ = Annual Rate, $n$ = Compounding Frequency, $t$ = Time in years.
Key Applications (FAQ)
How is PV used in Investment?
If a college will cost ₹$50$ lakh in $10$ years, this calculator tells you the exact lump sum (PV) you need to set aside **today** to meet that goal, assuming your money grows at your expected investment rate.