Enter the present value (PV) ($) of a single lump-sum cash flow and the discount rate (%) into the Reverse NPV Calculator. The calculator will evaluate and display the implied future cash flow (future value). Note: this does not reconstruct a full NPV cash-flow stream; it assumes one cash flow occurring after a specified number of periods.
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Reverse NPV (Single Cash Flow) Formula
The following formula is used to calculate the implied single future cash flow (future value) from a present value. This is the reverse of the standard present value discounting equation for a single lump sum.
FV = PV * (1+DR/100)^n
- Where FV is the future value / cash flow at the end of n periods ($)
- PV is the present value today ($)
- DR is the discount rate per period (%) (i.e., the effective rate used for each period)
- n is the number of periods (for the Single Period tab, n = 1)
How to Calculate Reverse NPV?
The following example problems outline how to calculate the implied single future cash flow (future value) from a present value.
Example Problem #1:
- First, determine the present value (PV) ($).
- The present value (PV) ($) is given as: 10,000.
- Next, determine the discount rate per period (%).
- The discount rate (%) is provided as: 15.
- Finally, calculate the future value (FV) assuming the cash flow occurs after 1 period (n = 1) using the equation above:
FV = PV * (1+DR/100)
The values given above are inserted into the equation below and the solution is calculated:
FV = 10,000 * (1+15/100) = 11,500.00 ($)
Example Problem #2:
For this problem, the variables required are provided below (assume n = 1 period):
present value (PV) ($) = 60,000
discount rate (%) = 20
Test your knowledge using the equation and check your answer with the calculator above.
FV = PV * (1+DR/100) = ?
