A settlement present value calculator answers a deceptively simple question: what is a future payout actually worth today? Because money has time value, a structured settlement paying out over many years is worth less than its headline total. This tool discounts a single future lump sum or a stream of periodic payments at a rate you choose, and compares the result against an immediate cash offer.
How it works
The tool applies the standard discounted cash flow method. Each future payment is discounted by dividing it by (1 + r) raised to the number of periods until it is paid, where r is the discount rate per period. For an annual rate applied to monthly payments, the per-period rate is the annual rate divided by twelve.
For a lump sum, present value is simply amount / (1 + r)^n, where n is the number of periods until payment.
For a payment stream, the present value is the sum of each individual payment’s discounted value across all periods. The tool walks every payment so irregular timing and a finite number of payments are handled exactly, rather than relying on a closed-form annuity shortcut.
PV = Σ payment_t / (1 + r)^t, summed over every future payment t.
Example and notes
A settlement pays $2,000 per month for 120 months (ten years), a headline total of $240,000. Discounted at a 5% annual rate, the present value is roughly $188,000 — meaning a same-day cash offer above that figure is, in pure financial terms, worth more.
The discount rate is the single most important input: raise it to 8% and the same stream’s present value falls noticeably, because future dollars are penalized more heavily. Try a range of rates to bracket the answer. This is a financial estimate — it does not model fees, taxes, or the security and budgeting benefits a structure can provide, which often matter to injured plaintiffs.