Present Value of Cash Flows Calculator

Rate per Period:

Number of Lines:

Line	Periods		Cash Flows
1		@
2		@
3		@

Cash Flows at Period

Answer:

For the Cash Flow Series
Present Value = $8,395.63

Cash Flow Stream Detail
Period	Cash Flow	Present Value
1	925.00	889.42
2	925.00	855.21
3	925.00	822.32
4	925.00	790.69
5	925.00	760.28
6	725.25	573.18
7	725.25	551.13
8	725.25	529.93
9	725.25	509.55
10	725.25	489.95
11	2,500.00	1,623.95
	Total:	8,395.63

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Calculator Usage

Calculate the present value of a series of future cash flows. More specifically, you can calculate the present value of uneven cash flows (or even cash flows).

Inputs

Rate per period: This is your discount rate or your expected rate of return on the cash flows for the length of one period.
Periods: This is the frequency of the corresponding cash flow. These are often the equivalent time period of months or years but a period can be any repeating time unit that payments are made.
Cash Flows: The cash flow (payment or receipt) made for a given period or set of periods.
Payments at Period Beginning or End: Choose if payments are made at the beginning of each period (like an annuity due) or at the end of each period (like an ordinary annuity)

How to Calculate the Present Value of Uneven Cash Flows

Suppose you were offered an investment that would pay you a cash flow stream 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, CF, where i is the interest rate in decimal form and n is the period. The equation for the present value of each cash flow in the series is:

PV_n = CF_n / (1 + i)ⁿ

For example, i = 11% = 0.11 and for period n = 5, CF = 500.
Therefore,
PV₅ = CF₅ / (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% annual return on your investment your should pay, at most, $1,689.94 lump sum 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