# Net Present Value Calculator

This page calculates the Net Present Value (NPV) for an investment, given the initial investment value, the discount rate and the profit for each each period. Click the Help tab for full instructions on how to use this tool.

The NPV Calculator is used to calculate the Net Present Value of an investment, given the initial investment, the discount rate and a series of returns

**Initial Investment** - This is the amount initially invested in the project. Typically this will be a positive amount. For example, if the investment is in new equipment which costs $5000, you would enter 5000 here. A negative amount is allowed, and would indicate some initial positive return from the project.

**Discount Rate** - This is the rate used to discount future returns back to present values. It is expressed as a percentage, and will typically be a small, positive value e.g. 5%. Negative values (down to -100%) are allowed, however. This could be the case if the the project is being considered an environment where there is deflation, for example.

**Profit Values** - The remaining fields are used to enter the profit received at the end of each period. A positive amount indicates that a profit is expected. A negative amount indicates a loss (this could be the case if there are ongoing costs associated with the project which outweigh the profits in a given period).

When entering values, you can use whatever currency you like, as long as both values are in the same currency. You don't need to use a currency symbol such as $ or £ (and doing so will cause an error).

Click the **+** button to add another period. Another field will appear on the form to allow you to enter another profit value for that period.

## Using the Calculator

Click the **Calculate** button to calculate the Net Present Value. The value will be shown below the button.

If any of the values have been entered incorrectly an error message will be displayed next to the field.
Fix the error, then click **Calculate** again to perform the calculation.

Click the **Clear** button to clear all data from the form and start again.