# Net Present Value Calculator

Instructions: Use this Net Present Value Calculator to compute the net present value ($$NPV$$) of a stream of cash flows by indicating the yearly cash flows ($$F_t$$), starting at year $$t = 0$$, and the discount rate ($$r$$) (Type in the cash flows for each year from $$t=0$$ to $$t = n$$. Type '0' if there is no cash flow for a year):

Interest Rate $$(r)$$ =
Type the yearly cash flows (comma or space separated)

The net present value ($$NPV$$) of a stream of cash flows $$F_t$$ depends on the discount interest rate $$r$$, and the cash flows themselves. It corresponds to the sum of the present values of ALL cash flows associated to a project.

### How do you calculate net present value? What formula do you use?

The net present value ($$NPV$$) can be computed using the following formula:

$NPV = \displaystyle \sum_{t=0}^n \frac{F_t}{(1+i)^t}$

where $$F_t$$ corresponds to the total sum of cash flows for period $$t$$. Such sum can be negative or positive. The factor $$(1+i)^t$$ in the denominator is part of the discount factor used to bring the value of future cash flows into present values.

### What is NPV discount rate?

The discount rate corresponds to $$i$$ in the above equation, and represents the interest rate, or more precisely, the cost of capital, which is used to bring future values into present values.

### How to compute the net present value excel

Excel has a built in function, the =NPV() function that allows you to compute the present value of cash flows.

### What other calculators can I use to evaluate a project?

There are other metrics used to evaluate a projects, which use different angles to assess profitability. You can also use our internal rate of return calculator , the payback period calculator , or our profitability index calculator .