Present Value Discount Rate Calculator

Present Value Discount Rate Calculator

This calculator helps you determine the discount rate required to make a future sum of money equal to a specific present value. It's a crucial tool in financial analysis, investment decisions, and economic modeling where understanding the time value of money is paramount.

Result

function calculateDiscountRate() { var presentValue = parseFloat(document.getElementById("presentValue").value); var futureValue = parseFloat(document.getElementById("futureValue").value); var numberOfPeriods = parseFloat(document.getElementById("numberOfPeriods").value); var resultDiv = document.getElementById("result"); resultDiv.innerHTML = ""; // Clear previous results if (isNaN(presentValue) || isNaN(futureValue) || isNaN(numberOfPeriods) || presentValue <= 0 || futureValue <= 0 || numberOfPeriods <= 0) { resultDiv.innerHTML = "Please enter valid positive numbers for all fields."; return; } // The formula for present value is PV = FV / (1 + r)^n // To find r (the discount rate), we rearrange: // (1 + r)^n = FV / PV // 1 + r = (FV / PV)^(1/n) // r = (FV / PV)^(1/n) – 1 var discountRate = Math.pow((futureValue / presentValue), (1 / numberOfPeriods)) – 1; if (isNaN(discountRate) || discountRate < 0) { resultDiv.innerHTML = "Calculation error. Please check your inputs."; return; } var discountRatePercentage = discountRate * 100; resultDiv.innerHTML = "The required discount rate (r) is: " + discountRatePercentage.toFixed(2) + "% per period."; } .calculator-wrapper { font-family: 'Arial', sans-serif; max-width: 600px; margin: 20px auto; padding: 20px; border: 1px solid #ddd; border-radius: 8px; box-shadow: 0 2px 4px rgba(0, 0, 0, 0.1); background-color: #fff; } .calculator-form { margin-bottom: 20px; padding-bottom: 20px; border-bottom: 1px solid #eee; } .calculator-form h2 { text-align: center; color: #333; margin-bottom: 15px; } .calculator-form p { font-size: 0.95em; color: #555; line-height: 1.5; margin-bottom: 20px; } .form-group { margin-bottom: 15px; } .form-group label { display: block; margin-bottom: 5px; font-weight: bold; color: #444; } .form-group input[type="number"] { width: 100%; padding: 10px; border: 1px solid #ccc; border-radius: 4px; box-sizing: border-box; /* Include padding and border in the element's total width and height */ font-size: 1em; } .form-group input[type="number"]:focus { border-color: #007bff; outline: none; box-shadow: 0 0 0 2px rgba(0, 123, 255, 0.25); } button { display: block; width: 100%; padding: 12px 20px; background-color: #007bff; color: white; border: none; border-radius: 5px; font-size: 1.1em; cursor: pointer; transition: background-color 0.3s ease; margin-top: 10px; } button:hover { background-color: #0056b3; } .calculator-result { text-align: center; } .calculator-result h3 { color: #333; margin-bottom: 10px; } #result p { font-size: 1.1em; color: #333; } #result strong { font-size: 1.2em; }

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