Result
Needed today
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
Present value = target future sum ÷ (1 + annual return ÷ 100) ^ number of years. It's the reverse of future value: there, a known sum today grows into an unknown future amount; here, a known future target works backward to the sum needed today.
The higher the expected return or the longer the period, the less needs to be invested today — the money grows on its own through compounding. That's why the same future target can require very different sums today depending on how conservatively or aggressively the money is invested.
The same math, with a different meaning for the rate, is used when discounting cash flows in an NPV calculation — there, present value is computed not for a single future sum but for a whole series of yearly cash flows. A similar-looking but fundamentally different calculation is the inflation calculator: there, a sum is divided by inflation rather than a return, and the result means "how much purchasing power erodes," not "how much to invest."