# Present Value of a Lump Sum Calculator

## What does it do?

This present value of a lump sum calculator works out the value today of a lump sum of money received at a future date, taking into account a discount rate.

More precisely, the present value of a lump sum calculator calculates the present value (PV) of a lump sum (FV) received at the end of period n using a discount rate i.

## Formula

The calculator uses the present value of a lump sum formula as shown below:

`PV = FV / (1 + i)n`

Full details of the formula can be seen at our present value of a lump sum formula page.

## Instructions

The Excel present value of a lump sum calculator, available for download below, is used to compute the present value by entering details relating to the future value, discount rate and the n
number of periods. The calculator is used as follows:

### Step 1

Enter the Future value (FV). The future value of the lump sum is entered. This is the amount received at the end of period n.

### Step 2

Enter the discount rate (i). The discount rate is the rate used to discount the lump sum back from the end of period n, to the beginning of period 1 (today). The rate should be for a period, so for example, if the period is a year, then the rate should be the yearly rate.

### Step 3

Enter the number of periods (n). The number of periods is entered. A period can be any term (month, year etc), but must be consistent with the discount rate provided (see step 2)

### Step 4

The present value of a lump sum calculator works out the present value (PV). The answer is the value today (beginning of period 1) of a lump sum of money received at the end of period n, at a discount rate of i.