# Present Value of Cash Flows Calculator

Use the Present Value of Cash Flows Calculator to calculate the present value of fixed or changing cash flows to allow insight into future profits based on current costs and known interest rates.

 Interest Rate (discount rate per Period): % Compounding (times per Period): Cash Flows at (of each Period): BeginningEnd Number of Lines: 123456789101520253035404550 Line Periods Cash Flows 1 @ 2 @ 3 @
Present Value of Cash Flows Calculator Results
For the Cash Flow Series
PV763199.88
Cash Flow Stream Detail
PeriodCash FlowPresent Value
Total:763199.88

## Present Value of Cash Flows - Determine the Value of Future Cash Flows, Today How would you like to know if the cash flow you are expecting to receive in the near future would be worth as much as it is today? Present value of cash flows is the method to calculate the current value of funds based on a future value.

This method is based on the time value of money. It means that the money you are expecting in a year's time could be of less value, had you received it today; because the money in hand today can be invested to earn interest.

### Discounting rate

The present value of cash flow uses a discounting formula to calculate the present value of future cash flows at a specified rate of return. This rate of return is discounted from the future cash flows. This means the higher the discount rate the lower the present value of future cash flows.

## Using the Online Calculator to Calculate Present Value of Cash Flows

Go for an automatic tool to calculate PV of cash flows if you want to be sure that your calculations are quick and precise. A calculator will give you a detailed report about the present value of your future cash flows. These cash flows can be fixed or changing. Factors that are important to achieve an accurate result on a calculator are:

1. Interest rate or discount rate (per period) - While using iCalculators calculator, you have to enter the expected interest rate in this field. This should be a number that you are expecting to gain per period. Discounting is a very important factor in calculating the present value of any future cash flows so define it wisely.
2. Compounding (Times per period) - The calculator uses the compounding factor for the interest earned, which means your interest earns interest; the compounding occurs needs to be entered here.
3. Cash flow (of each period) - Here, you need to select the point of cash flow. 'Beginning' to be selected if you are expecting the cash flows at the beginning of every period. 'End' to be selected if the cash flows are expected at the end of every period.
4. Number of lines - The value of expected recurring cash flows to be selected here. In case of a fixed lump sum amount this should be selected as 1.

### Results

According to the inputs based on the above criteria, the calculator will provide you with a table that will contain:

• Cash flow series (PV) - Total present value after combining all the cash flows from each period.
• Cash flow stream - This will show you the present value of each period against the future cash flows.

## Factors that impact Present value calculations

### Rate of return

The most important factor that has an impact on present value is interest or discount rate. To give an example, there can be two situations, first, you are expecting a cash flow of 1k per month after 1 year for 6 months, or you want to receive a lump sum of 5.5k now. The present value will depend on the expected rate of return.

Generally, people tend to go for the first option as the money invested right now can earn interest. If the interest rate is not high enough to match the total loss occurred right now, it would be a wise decision to opt for the first option.