Independent finance learning
Present Value Calculator: DCF Basics
Discount one future cash flow to present value and explore how the discount rate and timing affect the result.
Try the numbers
Formula and inputs
Present value = future cash flow ÷ (1 + discount rate)^years
Enter the annual rate as a percentage. This reverses annual compounding for one payment at the end of the stated year.
Worked example
£10,000 received in five years, discounted at 10% per year, has a present value of approximately £6,209.21.
Assumptions and limitations
This discounts one cash flow only. It is not a complete company DCF, which requires forecasts, an appropriate discount rate and often a terminal value. Tax, inflation and risk are not independently estimated.
Understand the result
Compound interest explained: formula and examplesSources and further reading
Sources checked 4 October 2026. Worked examples are fictional HC teaching illustrations.