Present Value Calculator

A common approach is your realistic alternative investment return — if you could otherwise earn 6% investing elsewhere, use 6% as your discount rate when evaluating whether a future payment is a good deal.

Because money available today can be invested and grow — receiving the same amount later means missing out on that growth, so the future amount must be 'discounted' down to reflect what it's genuinely worth in today's terms.

Yes — compare the lump-sum offer to the present value of the full annuity payout at a realistic discount rate; if the lump sum is smaller than this calculator's present value, the annuity option is arguably the better deal (before taxes and personal circumstances).