Present Value Discount Factor Calculator

How it is calculated

The tool returns the multiplier that turns a future amount into today's value: DF = 1 ÷ (1 + rate ÷ 100)periods. The rate is the discount rate for one period as a percentage (8 means 8%), and periods is how many of those periods pass before the cash arrives. The rate and the periods must use the same unit: a yearly rate with years, or a monthly rate with months. The factor is shown to four decimals, and a rate of 0 or 0 periods gives exactly 1.0000. Fractional periods such as 2.5 are used exactly and echoed as typed. Periods must be between 0 and 1000, and the rate must be above −100%; negative periods or a rate of −100% or lower show no result. To use the factor, multiply a future amount by it. The tool does not take an amount and does not add up a series of payments.

Common mistakes

• Mixing units, such as a yearly rate with a number of months. For monthly periods, divide the yearly rate by 12 first and enter the months as periods.
• Typing the rate as a decimal. Enter 8 for 8%; 0.08 is read as 0.08% and the factor comes out near 1.
• Applying the factor to a sum of several payments due in different years. Each payment needs the factor for its own year.
• Entering negative periods to look backwards in time. The tool shows no result for them, so use the compounding growth factor separately if you need one.
• Entering more than 1000 periods. Past that limit there is no result; at 1000 periods the factor is already shown as 0.0000.