NPV Calculator
Determine the profitability of an investment by calculating its Net Present Value.
- Free Online Tool
- Instant Results
- Mobile Friendly
- No Installation
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Understanding This Calculator
NPV Formula
Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows over a period of time.
NPV = Σ [Rt / (1+i)^t] - Initial Investment
- Rt: Net cash inflow-outflows during a single period t
- i: Discount rate or return that could be earned in alternative investments
- t: Number of time periods
Example 1
Invest $1,000, receive $1,200 in 1 year. Discount rate 10%.
- PV of Cash Flow: 1200 / (1.10)^1 = 1090.90
- NPV: 1090.90 - 1000 = $90.90 (Good Investment)
Example 2
Invest $1,000, receive $1,050 in 1 year. Discount rate 10%.
- PV of Cash Flow: 1050 / (1.10)^1 = 954.54
- NPV: 954.54 - 1000 = -$45.46 (Bad Investment)
How to Use
- Enter Initial Investment.
- Enter Discount Rate.
- Enter annual cash flows separated by commas (e.g., 1000, 2000, 3000).
Frequently Asked Questions
Can I rely on these financial figures?
This tool provides estimates based on your inputs. For improving financial decisions, please consult a professional advisor.
Is this calculator free to use?
Yes, this calculator is 100% free and does not require any registration or subscription.
Is it mobile-friendly?
Absolutely! Our tool is optimized for all devices, including mobile phones, tablets, and desktop computers.