NPV Calculator

Net present value of a cash-flow series at a chosen discount rate.

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Educational estimate only — not investment, lending, or financial advice. Confirm figures with statements or a qualified professional before you act.

About this tool

Enter a discount rate and a list of cash flows, with the first being today's outlay. The calculator discounts each flow and adds them up. A positive NPV means the project earns more than the discount rate.

How to use

1
Step 1
Enter the discount rate as a percentage.
2
Step 2
Add the cash flows in order, starting with today. Outflows are negative.
3
Step 3
Press Calculate to see the net present value.

How it works

Each cash flow is divided by (1 + rate) raised to the number of periods since today. The first flow is at time zero and is not discounted. Higher discount rates shrink later flows more, so the same project can switch from positive to negative NPV as the rate rises. All periods are assumed equal in length.

NPV = Σ CFₜ ÷ (1 + r)^t      t = 0, 1, 2, …

Worked example

A four-year project at 10%

Input
Cash flows −10,000, 3,000, 4,200, 6,800, 4,000; rate 10%
Output
NPV $4,039.34
Walkthrough
3,000 ÷ 1.1 = 2,727.27; 4,200 ÷ 1.21 = 3,471.07; 6,800 ÷ 1.331 = 5,108.94; 4,000 ÷ 1.4641 = 2,732.05. Together 14,039.34, less the 10,000 outlay, is 4,039.34. For −50,000 followed by four years of 15,000 at 8%, the NPV is −318.10, so the project falls just short.

Limitations

  • Equal-length periods only. For irregular dates use XIRR.
  • The result depends entirely on the discount rate you choose.

Questions

How do I calculate NPV?
Discount every cash flow by (1 + rate)^t and add them. The first flow, at time 0, is not discounted.
What does a positive NPV mean?
The project returns more than the discount rate, so it adds value on those assumptions.
Is the first cash flow discounted?
No. This tool treats it as today's cash flow, unlike spreadsheet NPV functions that discount the first value by one period.
How is NPV related to IRR?
IRR is the discount rate at which NPV is zero.

Features

  • Time-zero first flow
  • Any number of periods
  • Runs in your browser

Guides

Related resources

Guides and videos from around the web—opens on YouTube or the publisher’s site.

  • Present value and future value

    Khan Academy

    TVM vocabulary for N/I/Y/PV/PMT/FV solves.

    Watch on YouTube

  • Compound interest introduction

    Khan Academy

    Core compounding behind TVM and ICONV tools.

    Watch on YouTube

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