Calculator

Net Present Value Calculator

See whether an upfront cost is worth it, once every future cash flow it produces is discounted back to today's dollars.

← Read the Net Present Value concept page

Initial investment (upfront cost)

Cash flow received at the end of each year

Number of years

yrs

Discount rate (your opportunity cost)

Net present value

-$63.62

Negative — expected to cost more than the value it creates.

Cash flows, undiscounted

$12,000.00

Cash flows, discounted

$9,936.38

How the math works

The calculator discounts each year's cash flow back to today using PV = CF / (1 + r)^t, adds all of those present values together, and subtracts the initial investment (the cash flow at time zero):

Year 1: $3,000.00 → $2,777.78 today
Year 2: $3,000.00 → $2,572.02 today
Year 3: $3,000.00 → $2,381.50 today
Year 4: $3,000.00 → $2,205.09 today

Undiscounted, the 4-year stream of cash flows totals $12,000.00 — but discounted back to today at 8%, it's only worth $9,936.38. Subtracting the $10,000.00 upfront cost leaves an NPV of -$63.62 — the difference between the naive undiscounted sum and NPV is exactly the cost of waiting for the money.