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What (who) is present value - definition
Present value
ECONOMIC CONCEPT DENOTING VALUE OF AN EXPECTED INCOME STREAM DETERMINED AS OF THE DATE OF VALUATION
Present discounted value; Hypothetical future value; Present Value; Present value of costs; Present worth; Years' purchase
In economics and finance, present value (PV), also known as present discounted value, is the value of an expected income stream determined as of the date of valuation. The present value is usually less than the future value because money has interest-earning potential, a characteristic referred to as the time value of money, except during times of zero- or negative interest rates, when the present value will be equal or more than the future value.
Present value
ECONOMIC CONCEPT DENOTING VALUE OF AN EXPECTED INCOME STREAM DETERMINED AS OF THE DATE OF VALUATION
Present discounted value; Hypothetical future value; Present Value; Present value of costs; Present worth; Years' purchase
·add. ·- ·Alt. of Present worth.
Present worth
ECONOMIC CONCEPT DENOTING VALUE OF AN EXPECTED INCOME STREAM DETERMINED AS OF THE DATE OF VALUATION
Present discounted value; Hypothetical future value; Present Value; Present value of costs; Present worth; Years' purchase
·add. ·- The principal which, drawing interest at a given rate, will amount to the given sum at the date on which this is to be paid; thus, interest being at 6%, the present value of $106 due one year hence is $100.
Examples of use of present value
1. Has the lot been reevaluated so as to reveal its present value?
2. "Social Security can be made permanently solvent only by reducing the present value of scheduled benefits and/or increasing the present value of scheduled tax increases," the paper said.
3. To reach a present value figure, future revenues must be reduced using an annual discount rate.
4. So as yields fall, the present value of their liabilities rises.
5. After restructuring, the net present value of Argentine debt is lower than that of Brazil or Uruguay.