Present Value of Future Cash Flows Calculator

About this Calculator

Calculate the present value of a series of future cash flows that start at the end of the first period. More specifically, you can calculate the present value of uneven cash flows (or even cash flows). Equivalent to the Excel function for NPV(rate,value1,[value2],[value3],...).

Rate per period is your discount rate or your expected rate of return on the cash flows for the length of one period. Number of periods can be 1 to 50 with any value for a cash flow for a period, including 0.

How to Calculate the Present Value of Uneven Cash Flows

Suppose you were offered an investment that would pay you cash flows over the next 7 years of 100, 200, 300, 400, 500, 600, 700. The total of these cash flows is 2,800 but if your required return on any investment is 11%, what is the maximum you should be willing to pay for this investment?

The present value, PV, of a series of cash flows is the sum of the present value of each cash flow, R, where i is the interest rate and p is the period.  The equation for the present value of each cash flow in the series is:

PV_p = R_p / (1 + i)^p

For example, i = 11% = 0.11 and for period 5, R = 500.
Therefore,
PV₅ = R₅ / (1 + 0.11)⁵
PV₅ = 500 / (1 + 0.11)⁵
PV₅ = 500 / (1.11)⁵
PV₅ = 500 / 1.685058
PV₅ = 296.73

Calculating the PV for each cash flow in each period you can produce the following table and sum up the individual cash flows to get your final answer.  If you wish to get a minimum return of 11% on your investment your should pay, at most, $1,689.94 for this investment at the beginning of period 1 (time 0).

Period	Cash Flow	Present Value
1	100.00	90.09
2	200.00	162.32
3	300.00	219.36
4	400.00	263.49
5	500.00	296.73
6	600.00	320.78
7	700.00	337.16
	Total:	1,689.94