Knowing how to calculate net present value can be useful when choosing investments. In a nutshell, an investment's NPV can help you to analyze its potential for profit.

To calculate return on investment, divide the amount you earned from an investment—often called the net profit, or the cost of the investment minus its present value—by the cost of the ...

Reviewed by Thomas J. Catalano Fact checked by Vikki Velasquez The discount rate refers to the interest rate used when calculating the net present value (NPV) of an investment. It represents the ...