NPV decision calculator.
Should you do it?
Net present value tells you whether a financial decision creates wealth or destroys it. The math is simple: future cash flows discounted back to today, summed up, minus the upfront cost. Three common scenarios below: pay off debt vs invest, take the new job, or any one-time investment with ongoing return.
NPV > 0: the decision creates wealth at your discount rate. NPV < 0: it destroys wealth. The discount rate is what you would otherwise earn on the same money. Use 7% as a default if you have no other anchor; that is roughly long-run real US equity return.
Methodology: bars/lines update with the active scenario. Debt: guaranteed return = debt rate, investment expected return is uncertain.
How NPV math works
- Present value of a future amount: PV = FV / (1 + r)n. $100 received in 10 years at 7% discount rate is worth $50.83 today.
- Net present value: sum of all discounted future cash flows minus initial cost. Positive NPV means the decision creates value at your discount rate.
- The discount rate matters more than people realize. A solar-panel investment is positive NPV at 4% and negative NPV at 12%. Same project, same costs, same savings. Different opportunity cost.
- Pay off debt vs invest is the simplest case. Paying down debt at rate D produces a guaranteed D% return. Investing produces an expected R% return with uncertainty. If D > R: pay debt. If R is much greater than D: invest. If close: pay debt; the certainty premium usually wins.
- This tool uses real (inflation-adjusted) returns implicitly: enter your real expected return as the discount rate. If you enter 10% nominal, your real comparison should also be nominal (3% inflation × 25 years still erodes purchasing power).
Not financial advice. NPV depends on inputs; verify your discount rate before relying on the verdict.