Present Value
Definition
Today's worth of a future sum, discounted by an interest rate. Anchors capital budgeting and asset pricing.
Example
$1,000 in five years at a 5% discount rate is worth about $784 today.
Today's worth of a future sum, discounted by an interest rate. Anchors capital budgeting and asset pricing.
$1,000 in five years at a 5% discount rate is worth about $784 today.