Present Value

Present Value (PV) is a financial concept that determines the current worth of a sum of money to be received or paid in the future, given a specific interest rate or discount rate. It reflects the idea that money available today is more valuable than the same amount in the future because it can be invested to earn returns. By calculating PV, you can assess whether future cash flows are worth pursuing today, helping with investment decisions, loans, or comparing options. Essentially, PV translates future financial benefits into their equivalent value today.