🔙 Value Shrinker (Discounting)

Goal: Calculate what a future amount is worth today.
PV pulls money backward through time. Money shrinks because of lost interest opportunity.

Present (Today)
Future (Goal)
DISCOUNT RATE
FV
-
Future Goal
-
Inflation / Rate
Ready...

💻 Formula Structure

=PV(rate, nper, pmt, [fv], [type])
  • 1. Rate: Interest rate per period (e.g. 5%).
  • 2. Nper: Number of periods (Years).
  • 3. Pmt: Regular payments (use 0 if lump sum).
  • 4. Fv: Future Value goal.
-- How much to deposit today?
=PV( 5%, 5, 0, 50000 )
Present Value:
-

⚠️ Common Pitfalls

🚫 Negative Result
PV usually returns a negative number. This means you must pay (outflow) that amount today to receive the positive Future Value later.
💡 Annuities vs Lump Sum
PV can value a stream of payments (use PMT) OR a single future lump sum (use FV). You can even mix both!