Money you receive later is worth less than money today, because today's money could be earning a return. Enter a future amount, any yearly payments and the rate of return to see what they are worth now.
The discount rate is the return you could earn elsewhere with similar risk. Use a savings or bond rate for safe money and a higher rate for uncertain money.
Present value is how lottery lump sums, pension buy-outs, lawsuit settlements and business investments are compared: convert every option to today's money, then pick the largest.
Common questions
What discount rate should I use?
The return you would realistically get on the money with similar risk — for example a savings account or government bond rate for a guaranteed payment.
Is present value the opposite of future value?
Yes. Future value grows today's money forward at a rate; present value pulls future money back to today at the same rate.