The Collaborative International Dictionary
Present value \Pres"ent value\ or Present worth \Pres"ent worth\ (of money payable at a future date). 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.
Wikipedia
In economics, present value, 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 always less than or equal to the future value because money has interest-earning potential, a characteristic referred to as the time value of money, except during times of negative interest rates, when the present value will be less than the future value. Time value can be described with the simplified phrase, “A dollar today is worth more than a dollar tomorrow”. Here, 'worth more' means that its value is greater. A dollar today is worth more than a dollar tomorrow because the dollar can be invested and earn a day's worth of interest, making the total accumulate to a value more than a dollar by tomorrow. Interest can be compared to rent. Just as rent is paid to a landlord by a tenant, without the ownership of the asset being transferred, interest is paid to a lender by a borrower who gains access to the money for a time before paying it back. By letting the borrower have access to the money, the lender has sacrificed the exchange value of this money, and is compensated for it in the form of interest. The initial amount of the borrowed funds (the present value) is less than the total amount of money paid to the lender.
Present value calculations, and similarly future value calculations, are used to value loans, mortgages, annuities, sinking funds, perpetuities, bonds, and more. These calculations are used to make comparisons between cash flows that don’t occur at simultaneous times, since time dates must be consistent in order to make comparisons between values. When deciding between projects in which to invest, the choice can be made by comparing respective present values of such projects by means of discounting the expected income streams at the corresponding project interest rate, or rate of return. The project with the highest present value, i.e. that is most valuable today, should be chosen.
Usage examples of "present value".
Should the reading on the scale deviate from its present value by more than 50 percent, the bomb will detonate.
When I was visiting ancient cities, sacred but wholly dead, and without present value for the human race, I promised myself to save this Rome of mine from the petrification of a Thebes, a Babylon, or a Tyre.
He was hardly rich by the standard of the time, but had enough money to support himself forever without reducing the present value of his resources.
For example, one can calculate the probability that the universe is expanding at nearly the same rate in all different directions at a time when the density of the universe has its present value.
The land was bought when that part of the coast was more or less uninhabited, so that this sum bears absolutely no relation to the present value of the place.
I should also explain that at six-per-cent compound interest money doubles itself in something like twelve years, and that the present value of that claim as I have stated it in the letter is something over a million dollars.
Even if Grunewald had jettisoned material into space, the present value would not be far from that.
With a shorter period of rotation, equal to its present value of about 14.