DEFINITION of 'Present Value  PV'
The current worth of a future sum of money or stream of cash flows given a specified rate of return. Future cash flows are discounted at the discount rate, and the higher the discount rate, the lower the present value of the future cash flows. Determining the appropriate discount rate is the key to properly valuing future cash flows, whether they be earnings or obligations.
Also referred to as "discounted value".
INVESTOPEDIA EXPLAINS 'Present Value  PV'
This sounds a bit confusing, but it really isn't. The basis is that receiving $1,000 now is worth more than $1,000 five years from now, because if you got the money now, you could invest it and receive an additional return over the five years.
The calculation of discounted or present value is extremely important in many financial calculations. For example, net present value, bond yields, spot rates, and pension obligations all rely on the principle of discounted or present value. Learning how to use a financial calculator to make present value calculations can help you decide whether you should accept a cash rebate, 0% financing on the purchase of a car or to pay points on a mortgage.

Net Present Value  NPV
The difference between the present value of cash inflows and ... 
Discount Rate
The interest rate charged to commercial banks and other depository ... 
Actuarial Equivalent
Actuarial equivalent is generally used for applying some measurement ... 
Yield
The income return on an investment. This refers to the interest ... 
Internal Rate Of Return  IRR
The discount rate often used in capital budgeting that makes ... 
Future Value  FV
The value of an asset or cash at a specified date in the future ...

Investing Basics
Calculating The Present And Future Value Of Annuities
At some point in your life, you may have had to make a series of fixed payments over a period of time  such as rent or car payments  or have received a series of payments over a period of time, ... 
Bonds & Fixed Income
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Investopedia explains the natural log and exponential functions used to calculate this value. 
Bonds & Fixed Income
Understanding Bond Prices and Yields
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Investing Basics
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Find out why time really is money by learning to calculate present and future value. 
Forex Education
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Options & Futures
What are the disadvantages of using net present value as an investment criterion?
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Budgeting
What's the difference between net present value and internal rate of return? How are they used?
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Professionals
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Fundamental Analysis
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Fundamental Analysis
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