Definition of present value in English:

present value

(also net present value)


  • The value in the present of a sum of money, in contrast to some future value it will have when it has been invested at compound interest.

    ‘£110 due in 12 months' time has a present value of £100 today, if invested at an annual rate of 10 per cent’
    • ‘The fundamental value of a stock is of course in theory the present value of all future cash flows received by the owner of the stock.’
    • ‘But at the end of the day, it is the net present value of the future cash - whether this is generated from everyday trading or sales of trading assets (surplus or otherwise) - that should determine valuation.’
    • ‘It uses a discount rate of 7.5 per cent to calculate the present value of future earnings from its policies.’
    • ‘Oil stocks are normally valued on the basis of the net present value of future cashflows.’
    • ‘Then one can do a simple calculation to put some realism into these mind-boggling figures of the future by calculating their present values.’
    • ‘We look at the net present value of expected future cash flows.’