How to calculate present value in Excel
Formula (Excel and Google Sheets)
=PV(B4,B3,0,-B2)Use PV with the rate, the years and the future amount: =PV(B4,B3,0,-B2) is what that amount is worth today.
- Result on the example
- $31,370.62 in
B5 - Works in
- Every current version
- Google Sheets
- Same formula
See it work
The formula is already in B5. Change any input and the result updates, or edit the formula to experiment.
How it works
Present value runs compound growth backwards: $31,370.62 invested today at 6% a year grows to $50,000 in 8 years. PV's third argument is a regular payment, 0 here because there is a single amount, and the fourth is the future value, entered as a negative so the result comes out positive.
=PV(B4,B3,0,-B2)Result31370.61857
B46.0%The value in B4.
B38The value in B3.
B2$50,000The value in B2.
-B2-50000Makes the value negative.
PV(B4,B3,0,-B2)31370.61857PV: Present value of future payments.- rate
B46.0% - nper
B38 - pmt
0 - fv
-B2-50000
- rate
In Google Sheets
The same formula works in Google Sheets: =PV(B4,B3,0,-B2). We ran it in Google Sheets mode on the same data and it returns $31,370.62.
Other ways to do it
Each one was run on the same example sheet.
| Formula | Result | When to use it |
|---|---|---|
| =B2/(1+B4)^B3 | $31,370.62 | The discounting written out: divide by (1 + rate) once for every year. |
| =PV(B4,B3,-B2/B3) | $38,811.21Different result | If the same total arrives as equal yearly payments instead, its value today is higher. $6,250 a year for 8 years: $38,811.21. |
Common mistakes
- PV(B4,B3,-B2) without the 0 treats $50,000 as a payment every year, not a single amount.
- Use the rate per period: for monthly discounting, B4/12 and B3*12.
Try it yourself
Same data, empty answer cell. Your formula is graded instantly, then re-checked on changed data, so a typed-in number won't pass.
Calculate present value
B5, calculate the present value of the amount in B2 received in B3 years, at the discount rate in B4.Questions
What discount rate should I use?
The return you could get elsewhere at similar risk, or your cost of borrowing. The result is only as good as that rate.
How do I find the present value of uneven amounts?
Use NPV with the amounts in a range: =NPV(B4,C2:C9).
Checked by running on 2026-10-30: every formula and result on this page was calculated by the Spreadsheet Practice formula engine, in both Excel and Google Sheets modes.