Present value of cash flows is the sum of each future payment discounted back to today at a required return. Unlike a uniform annuity, this calculator handles uneven streams where each line can repeat for multiple periods at the same dollar amount.
Use it to value bond coupons, lease payments, project cash flows, or any irregular income schedule. For a single future sum or equal annuity, see the present value calculator. For investment decisions with an initial outlay, pair results with the net present value calculator.
Formula
Each cash flow at period t is discounted individually:
PVt=(1+mr)(t−T)×mCt
Where r is the annual discount rate, m is compounding frequency per year, and T=1 when payments arrive at period start (annuity due timing). With continuous compounding, use PVt=Ct⋅e−r(t−T).
Total present value is the sum: PV=∑t=1nPVt.
Worked Example
Discount rate 8% compounded annually, end-of-period timing. Cash flows: five payments of $925, five payments of $725.25, then one payment of $2,500.
PV=t=1∑11(1.08)tCt≈$6,736.24
The nominal sum of all payments is $10,751.25, but the time value of money reduces what they are worth today by roughly $4,015.
Frequently asked questions
How is this different from the present value calculator?
The standard present value calculator handles one future sum or a uniform annuity. This tool accepts multiple lines with different amounts and period counts, which is closer to real bond coupons, staged project revenues, or custom payment schedules.
When should I use beginning-of-period timing?
Choose beginning of period when cash arrives at the start of each interval (annuity due). Rent received on the first of the month or salaries paid upfront are common examples. End of period is the default for most bond coupons and year-end dividends.
What discount rate should I use?
Use your required return, weighted average cost of capital, or a risk-adjusted hurdle rate. For bonds, the market yield to maturity is typical. For personal planning, use an expected investment return or inflation-adjusted rate.
Does compounding frequency matter?
Yes. More frequent compounding increases the effective discount rate, lowering present value for the same stated annual rate. Match compounding to how often interest is credited on your benchmark investment.
How does this relate to net present value?
Present value sums discounted inflows. Net present value subtracts the initial investment (period 0 outflow) from that sum. If you have a single upfront cost, use the NPV calculator or subtract your initial outlay manually from the total PV here.
Resources and references
The formulas and methods in this calculator were checked against these independent sources.