Present value
ValuationDefinition
What a future sum of money is worth today, discounted by a rate of return. $100 in 10 years is worth less than $100 today because you could invest today's money.
Formula
PV = FV / (1 + r)^n
Example
$100 in 5 years at 8% discount rate = $68.06 today.
Related tool
Open the compound tool on Arsenal.finance →