Inputs
Results
Nominal present value
$0.00
PV considering growth and discounting, excluding inflation.
Inflation-adjusted (real) present value
$0.00
PV converted to real terms using the inflation input.
Discount factor (PV ÷ asset value today)
0.000000
Net rate spread (growth − fees − discount)
0.00%
Value Allocation: Life Estate vs. Remainder (Illustrative)
Assuming present value of full ownership equals today’s asset value, the implied life estate value is S₀ − PV(remainder). If negative, revisit discount and growth assumptions.
| Metric | Amount | Share of S₀ |
|---|---|---|
| Asset value today (S₀) | $0.00 | 100.00% |
| Present value of remainder | $0.00 | 0.00% |
| Implied present value of life estate | $0.00 | 0.00% |
Scenario Table (auto-recomputes)
Vary years and discount rate around your inputs to see sensitivity.
| Scenario | Years | Discount % | Growth % | Compounding | Nominal PV | Real PV | Discount Factor |
|---|
Year‑by‑Year Present Value Trajectory
Shows how the remainder’s present value changes as the time until possession shortens from n to 0 years.
| Years Until Possession | Nominal PV | Real PV |
|---|
Formulas Used
Let S_0 be asset value today, g growth, f fee drag, r discount, n years, and m compounding periods/year.
- Net growth:
g_net = g − f. - Periodic discounting:
PV = S_0 · [(1 + g_net/m) / (1 + r/m)]^(m·n) - Continuous compounding:
PV = S_0 · e^{(g_net − r)·n} - Real PV (inflation-adjusted):
PV_real = PV ÷ (1 + i)^n, withiinflation. - Discount factor:
DF = PV / S_0.
For life-contingent remainders, use an actuarial life expectancy for n. Jurisdictions may prescribe statutory rates or mortality tables.
How to Use
- Enter the asset’s current value and expected annual growth.
- Include any annual fee/expense drag to reduce growth.
- Provide the discount rate and choose compounding frequency.
- Select a fixed term or supply life expectancy years.
- Optional: add inflation to see the real present value.
- Press Calculate to update results and the scenario table.
- Export results using Download CSV or Download PDF.
This tool is educational and not legal, tax, or valuation advice.
FAQs
A remainder interest is the right to receive an asset after a prior interest ends, typically after a term certain or the life tenant’s death.
Choose “Life expectancy” and enter actuarial years. The tool discounts over those years. Some jurisdictions require specified mortality tables—apply their expectancy instead.
Use a market-based yield, statutory rate, or rate consistent with your valuation standard. Be consistent across scenarios and disclose your choice.
More frequent compounding lowers PV for a given nominal discount rate. Continuous compounding applies the exponential form shown in the formulas section.
The remainder’s value depends on the expected asset value when received. Growth increases the expected value, while fees reduce it. Both affect present value materially.
Inflation converts the nominal PV into “real” purchasing power. This can clarify results when comparing across time or policy scenarios.
It’s a robust educational tool. For legal, tax, or financial reporting, use applicable statutes, mortality tables, and professional standards, and document all assumptions.
Example Data Table
Illustrative values computed from the current inputs. Edit inputs and press Calculate.
| Example | Years | Discount % | Growth % | Nominal PV | Real PV |
|---|---|---|---|---|---|
| Quick check A | 5 | 4.0 | 2.0 | ||
| Quick check B | 10 | 6.0 | 2.0 | ||
| Quick check C | 15 | 8.0 | 2.0 |