This is a tool that calculates the present value of a single future amount (value) of money.

For this calculation, it is necessary to supply the following information:

• The future value of the amount.
• The term, i.e. the time between the present and future values. This can be expressed in years, months, weeks or days.
• The annual interest (discount) rate, which can be entered as either a nominal (default) or effective rate. If it is a nominal annual rate then it is used together with the compounding frequency to determine the interest rate applied per compounding period. An effective annual rate, on the other hand, is a rate that has already factored in the periodic compounding to give a rate equivalent to interest being compounded annually, and thus does not need compounding frequency for the tool calculation. On the tool form, the rate is usually expressed in percentage terms (unless the formatting is explicitly set to express it as a decimal).
• The compounding frequency, which specifies how often interest is compounded per year. The possible values for the compounding frequency are annual (default), semiannual, quarterly, monthly, weekly, daily or continuous. The compounding frequency is only important if a nominal annual interest rate is given, since an effective annual rate has already taken the periodic compounding into account.

Associated tool link: http://www.coggit.com/tools/present_value_of_future_amount.html