When you win a settlement, a lottery, or a buyout, you often face a choice: take a smaller lump sum today or a larger total paid out over years. The right answer depends on the time value of money, because payments received in the future are worth less than cash in hand. This calculator discounts the payment stream back to its present value using a discount rate you choose, usually the return you could earn by investing, then compares it directly against the lump sum offer. Enter the lump sum, the payment amount, how many payments there are, their frequency, and your discount rate, and it tells you which option is worth more today and by how much. A higher discount rate favors the lump sum. All calculations are performed privately in your browser.
It discounts the future payment stream to present value using a discount rate, then compares that to the cash lump sum offered now.
A higher discount rate lowers the present value of future payments, making the immediate lump sum relatively more attractive.
When the present value of the payment stream, at your discount rate, exceeds the lump sum offered today.
When you win a settlement, a lottery, or a buyout, you often face a choice: take a smaller lump sum today or a larger total paid out over years. The right answer depends on the time value of money, because payments received in the future are worth less than cash in hand.
Yes. Lump Sum vs Payments Calculator is completely free, with no sign-up and no usage limits.
Yes. Lump Sum vs Payments Calculator runs in any modern web browser. There is nothing to download or install.
Yes. Lump Sum vs Payments Calculator runs entirely on your device in your browser, so nothing you enter is uploaded to a server.