Asset Value Calculator
Know the installment, term and rate? Find the cash price (present value) of the asset. Great for comparing payment options.
Present value explained
Present value is what a future stream of payments is worth today, discounted at a given rate. It's the foundation of serious financial analysis.
Cash price of any installment offer
This calculator runs the present-value formula in reverse: given an installment amount, a term and a discount rate, it returns what the asset would cost today in cash. Use it to evaluate whether the cash price a retailer quotes is fair or whether the installment plan is hiding interest.
Example: a sofa offered at 10 × $250 with an estimated 2.5%/month financing rate has a present value of $2,187. If the store lists a cash price of $2,500, you'd still be paying about $313 in embedded interest even at the 'cash' price.
Present value and the cost of money
Present value is the foundation of every serious financial analysis: a future stream of payments, discounted at a chosen rate, expressed in today's dollars. The discount rate to use is your own opportunity cost — typically the return you'd earn on a safe investment.
FAQ
What does 'present value of an asset' mean?
It's how much a stream of future installment payments is worth today, after discounting each payment by a chosen interest rate. It lets you compare cash and installment offers on equal footing.
Which discount rate should I use?
Use your opportunity cost — typically the rate you'd earn on a safe investment (Treasury bills, CDs). The higher this rate, the lower the present value of the installment offer.