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Expected Monetary Value Calculator

Work out expected monetary value instantly with clear inputs, formula shown and shareable results.

About Expected Monetary Value Calculator

Expected monetary value weights each outcome by its probability and nets off certain costs. The most decision-useful output is the break-even probability: the success chance at which EMV turns positive, because arguing about that single number is far more productive than arguing about the whole model.

Formulas

EMV

EMV = P(success) x Upside - P(failure) x Downside - Upfront cost

Break-even probability

P* = (Downside + Upfront cost) / (Upside + Downside)

Worked example

With the default values below, Expected Monetary Value Calculator returns Expected monetary value of $710,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Probability of the favourable outcome
65
Value if it succeeds
1,800,000
Loss if it fails
600,000
Upfront cost either way
250,000

Results

Expected monetary value
$710,000.00
Probability-weighted upside
$1,170,000.00
Probability-weighted downside plus cost
$460,000.00
Probability needed to break even
35.42%

Step by step

  1. 1Values used
  2. 2EMV
  3. 3Break-even probability
  4. 4Expected monetary value= 710,000.00
  5. 5Probability-weighted upside= 1,170,000.00
  6. 6Probability-weighted downside plus cost= 460,000.00
  7. 7Probability needed to break even= 35.42

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

Does a positive EMV mean I should proceed?

Only if you can absorb the downside. EMV assumes you can repeat the bet many times; a single ruinous loss is not compensated by a favourable average.

Where do the probabilities come from?

Base rates from comparable past decisions are far more reliable than expert intuition. Calibrate against history where you can.

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