Present value
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Present value (also known by its acronym, PV; hereinafter, PV) is the value today of a future payment, or stream of payments, discounted at the appropriate rate of interest. PV is also the beginning amount that will grow to some future value.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Present value (PV). The value today of a future payment, or stream of payments, discounted at the appropriate rate of interest. PV is also the beginning amount that will grow to some future value.
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Present value (PV). The value today of a future cash flow or series of cash flows.
According to Macroeconomics by Mankiw (7th edition),
- Present value. The amount today that is equivalent to an amount to be received in the future, taking into account the interest that could be earned over the interval of time.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
