Find the discount rate that links a future value to a present value.
Please do not make financial decisions based on these results.
What is the Discount Rate Calculator?
Find the discount rate that links a future value to a present value. To use the Discount Rate Calculator, enter present value, future value, years; it returns discount rate, discount factor, and shows them instantly as you type.
Where the Discount Rate Calculator fits
Find the discount rate that links a future value to a present value. The main figure it returns is the Discount rate, worked out from the values you enter.
It belongs with the other investment tools. If you are comparing options or checking a result from another angle, try the Present Value Calculator, CAGR Calculator (Compound Annual Growth Rate) or the Finance Calculator.
How to use the Discount Rate Calculator
- Fill in the fields. You will need Present value ($), Future value ($), Years. Use a rate of return you consider realistic; small changes compound into large differences. Fields marked optional can stay at zero.
- Read the result. The highlighted box gives the Discount rate, and the cards below show Discount factor. Tables and charts break it down further.
- Test other scenarios. Results update as you type. Change one value at a time to see what drives the answer, and press Reset to go back to the defaults.
Formula and how it works
Example with real numbers
Here is the Discount Rate Calculator using the default values shown in the calculator above:
Inputs
| Present value ($) | 7,000 |
|---|---|
| Future value ($) | 10,000 |
| Years | 5 |
Results
| Discount rate | 7.39% |
|---|---|
| Discount factor | 0.7 |
With these inputs the calculator returns Discount rate: 7.39%. Change any value in the calculator to see how the result moves.
What if you change one input?
Sensitivity check: raising Present value ($) from 7,000 to 8,400 (about 20% higher) and leaving everything else as in the example above changes the results like this:
| Result | Example | After the change | Change |
|---|---|---|---|
| Discount rate | 7.39% | 3.55% | -52% |
| Discount factor | 0.7 | 0.84 | +20% |
The input that moves the result most is the one to check twice. Change it in the calculator above to test your own case.
What the results tell you
The results panel of the Discount Rate Calculator reports Discount rate and discount factor. Compare these figures while changing one input at a time, and use the related calculators below to look at the same situation from another angle.
Method and limits. This calculator applies the formula in the section above to your inputs, in your browser; nothing you enter is stored on our servers. Investment returns are not guaranteed. The result shows what the numbers you enter would produce, not what the market will do. It is for information, not financial, tax or legal advice.
Frequently asked questions
What does the discount rate represent?
The yearly return needed to make a future amount worth a given amount today.
Are investment returns guaranteed?
No. Real returns vary. Use these tools to compare scenarios, not to predict results.
What rate of return should I assume?
There is no guaranteed rate. Test a range of conservative and optimistic rates, and remember that fees and inflation reduce your real return.
Are the results guaranteed?
No. Results depend entirely on the numbers you enter and the formulas shown on this page. Please do not make financial decisions based on them alone; confirm important figures with a licensed professional.
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