The present value of a payment due to be received in the future. If a payment of amount A is due t periods into the future and the proportional interest rate remains constant at r per period, the present discounted value is given by
V = A/(1 + r)t = A(1 + r)−t.
The present discounted value of a stream of receipts spread over time is the sum of the present discounted values of the various parts of the stream. See also discounted cash flow.