NPV Calculator
Net present value, or NPV, compares money received later with money spent now. It discounts each future payment back to today at a rate you choose, then subtracts the upfront cost.
- Free
- Works offline after your first visit
- Saves on this device
- No sign-up
- Updated
How it works
This calculator assumes the same amount comes in at the end of each year. Each year's amount is divided by one plus the rate, raised to that year, and the results are added up. That total is the present value of the cash.
NPV is that total minus the upfront cost. A positive result means the cash flows still come out ahead at the rate you chose. The rate is your own choice, and a return you could get on a similar choice is a common starting point.
Worked example
Spending $100,000.00 now to receive $18,000.00 a year for 10 years, discounted at 8%, gives a present value of $120,781 and a net present value of $20,781.
Questions
What rate should I use?
It is your discount rate: the return you could get on a similar choice with similar risk. Try a few rates to see how much the answer moves.
Does this handle cash that changes each year?
Not here. This version assumes one steady amount each year, so uneven or growing payments need a separate calculation.
Why is the result sometimes negative?
A negative result means the future cash, valued today at your rate, adds up to less than the upfront cost.
More like this
- Investment CalculatorGrowth from a start amount and monthly deposits.
- Retirement CalculatorProjected savings from a balance, yearly saving and a return.
- 401k CalculatorBalance with pay, your share, employer match and return.
- Dividend CalculatorDividend yield and yearly income from a stock.
- Investment Return CalculatorTotal return and yearly rate from a start and end value.
- Commercial Mortgage CalculatorMonthly payment, balloon balance and interest on a commercial loan.