NPV Calculator
Calculate net present value of your investments and analyze project profitability with our online NPV calculator.
Total value of your investment
Present Value Of Cash Inflows (PVIFA)
₹36.05 K
Estimated returns
₹11.05 K
What is net present value (NPV)?
NPV or the net present value shows the difference between the present value of future cash flows and the current investment. We derive the present value of expected cash flows by discounting them at a specified rate of return. NPV is a widely used cash-budgeting method for assessing projects and investments.
To understand this term better, you first need to understand the term present value. For example, imagine that you want to have ₹25,000 in your account next year and the yearly interest rate on that account is 10%. This means that you need to deposit ₹22,500 in that account today to have ₹25,000 twelve months from now. The present value of ₹25,000 due in 12 months is ₹22,500.
Also note that for a positive discount rate, the future value (FV) is always higher than the present value (PV).
Frequently Asked Questions
What is an NPV calculator?
How is NPV different from IRR?
What are the expected cash flows?
What are the benefits of using Upstox NPV calculator?
The NPV calculator helps to determine the net present value of cash inflows and the net present value of an investment or project. The calculator provides precise results. However, it is important to note that an investment’s net present value is just an estimation. Also, the NPV calculator does not guarantee returns. Therefore, one should only use the calculator to estimate the net present value of their cash inflows.
By calculating the net present value of cash inflows from a project or investment, one can better plan investments and achieve financial objectives. Investing in items that earn inflation-beating returns can be calculated by determining the opportunity cost of an investment. Therefore, one can use the calculator to estimate the net present value of an investment option across multiple scenarios.
How do you calculate NPV using a calculator?
It’s simple to use the NPV calculator. You need to enter the variables, and the calculator quickly calculates the final answer.
The formula to calculate NPV is given as follows:
NPV = ∑(P/ (1+i)t ) – C
Where P = net period cash flow
i = discount rate (rate of return)
t = number of time period
C = initial investment
What is the formula for the present value of an annuity?
The formula used to calculate the PV of an annuity is as follows:
P = PMT x ((1 – (1 / (1 + r) ^ -n)) / r)
where P = the current value of the annuity
PMT = the installment amount paid for annuity
R= the rate of interest or discount rate
n = the number of installments left to receive
It can be tricky to calculate the PV of an annuity using the above formula. But our online present value of an annuity calculator will calculate the final amount in seconds.
How do you calculate the discount rate for NPV?
To determine the discount rate for future cash flow, you must know the NPV of your asset or investment. in the following formula you can solve for ‘r’ if you know the NPV:
P = PMT x ((1 – (1 / (1 + r) ^ -n)) / r)
Determining the discount rate is a critical concept in finance used by investors to decide the future value of an investment in your business. You can solve for a discount rate by using a present value calculator.
Is a higher or lower NPV better?
What is a good NPV?
