NPV Calculator — How to Calculate Net Present Value

Calculate NPV from an annual discount rate, initial investment, and year-by-year cash flows. Example: invest 10,000 at 10% with cash flows 3,000 / 4,200 / 6,800 → NPV ≈ 1,307.29. Runs in your browser; educational illustration only — not investment advice.

How it works

Enter an annual discount rate, a positive initial investment treated as an outflow at time 0, and a list of cash flows for years 1…n. The tool discounts each cash flow and subtracts the initial outlay. Results stay in your browser and are educational only.

Formula and assumptions

NPV = −I₀ + Σ (CFₜ / (1 + r)ᵗ) for t = 1…n, where r is the annual discount rate as a decimal. Keep these assumptions in mind:

Cash flows are treated as end-of-year amounts; intra-year timing is ignored.
The discount rate is constant across years; taxes, fees, and inflation are not modeled unless you bake them into r or the cash flows.
Results are educational illustrations, not forecasts or investment advice.

Example

Example: initial investment 10,000, discount rate 10% per year, cash flows 3,000 / 4,200 / 6,800 → NPV = −10000 + 3000/1.1 + 4200/1.1² + 6800/1.1³ ≈ 1,307.29.

When to use it

Rough project screening: compare discounted inflows to the upfront cost under a stated rate (illustration only).
Coursework: practice the NPV sum with a fixed discount rate and a short cash-flow list.
Sketch whether a multi-year cash plan clears a hurdle rate before talking to an advisor — not a substitute for full analysis.

Frequently asked questions

What NPV formula does this use?

NPV = −I₀ + Σ (CFₜ / (1 + r)ᵗ). I₀ is the initial investment (positive outflow), r is the annual discount rate as a decimal, and CFₜ are cash flows for years 1…n.

How is NPV different from simple ROI or CAGR?

Simple ROI is a single-period percentage of gain over cost. CAGR annualizes growth between two values. NPV discounts a sequence of cash flows and reports a present-value money amount, not a growth rate.

How should I enter cash flows?

List year-1 through year-n amounts separated by commas or new lines. Positive numbers are inflows; negatives are later outflows. At least one valid number is required.

Is this investment advice?

No. Numbers are educational illustrations only and are not investment, tax, or financial advice. A positive NPV under your inputs does not guarantee a real-world profit.

Important notice

NPV results are educational illustrations only and are not investment, tax, or financial advice. Discount rates, cash-flow timing, fees, taxes, and risk are simplified on this page. Past or hypothetical figures do not guarantee future results.

References: Investopedia NPV definition and present-value vs net present value guides; standard discounted cash-flow NPV formula.

Questions or feedback

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