ClueLuma

Net present worth (NPW) calculator

Combine discounted savings and terminal salvage with the negative initial investment.

NPW=−P+A×[(1+i)n−1]i×(1+i)n+S(1+i)n\mathrm{NPW} = -P + \frac{A \times \left[\left(1 + i\right)^{n} - 1\right]}{i \times \left(1 + i\right)^{n}} + \frac{S}{\left(1 + i\right)^{n}}

Calculator

Enter the values you know and leave one box empty. Calculate finds the empty one, the result or any input.

$
$/year
$
decimal
periods
$

Worked example

Given

  • PP = 50,000 $
  • AA = 9,000 $/year
  • SS = 5,000 $
  • ii = 0.08 decimal
  • nn = 10 periods
NPW=−50,000+9000×[(1+0.08)10−1]0.08×(1+0.08)10+5000(1+0.08)10≈12,707\mathrm{NPW} = -50{,}000 + \frac{9000 \times \left[\left(1 + 0.08\right)^{10} - 1\right]}{0.08 \times \left(1 + 0.08\right)^{10}} + \frac{5000}{\left(1 + 0.08\right)^{10}} \approx 12{,}707

Symbols and units

SymbolMeaningUnit
NPW\mathrm{NPW}net present worth$
PPinitial cost$
AAuniform net annual saving$/year
SSend-of-study salvage receipt$
iidiscount rate per perioddecimal
nnnumber of periodsperiods

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Results are estimates for study and screening. Check the inputs, units and assumptions before you use them for design, billing or contract decisions.