A tool designed to estimate the present value of future periodic payments, typically received as part of a legal settlement, allows recipients to understand the potential immediate financial worth of their agreement. For instance, it helps someone receiving payments over many years determine the lump-sum equivalent at the current time, considering factors such as discount rates and time value of money.
This type of financial tool offers invaluable assistance in making informed decisions about ones finances, especially when considering options like selling a portion or all future payments. Historically, understanding the true value of these long-term agreements was complex and often required expert consultation. Such tools empower individuals with greater financial control and transparency.