# How to calculate present value in Excel

Use PV with the rate, the years and the future amount: `=PV(B4,B3,0,-B2)` is what that amount is worth today.

**Excel:** `=PV(B4,B3,0,-B2)` (Every current version)

**Google Sheets:** the same formula works.

## Example

Sample data (row 1 is the header):

| A | B |
| --- | --- |
| Future payment | Value |
| Amount received later | 50000 |
| Years from now | 8 |
| Discount rate | 0.06 |
| Present value |  |

Formula in B5: `=PV(B4,B3,0,-B2)`

Result: $31,370.62

## 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.

## Other ways

- `=B2/(1+B4)^B3`: The discounting written out: divide by (1 + rate) once for every year.
- `=PV(B4,B3,-B2/B3)`: 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.

## 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)`.

Every formula and result on this page was checked by running it in the Spreadsheet Practice formula engine on 2026-10-30.

Source: https://spreadsheetpractice.com/formulas/calculate-present-value