Present Value

Provided by Khan Academy

The following tutorials go into a little more detail about the present and the future value of money.

The first tutorial discusses one of the most important terms in finance – present value. Present value is a future amount of money that has been discounted to reflect its current value, as if it existed today. If you know the present value, then it is very easy for you to understand the net present value, the discounted cash flow and the internal rate of return. The second video explores payment options using the concepts of the present and future value of money. What happens when the discount rate is changed? Let’s see what happens if discount rates are modified depending on how far out the payments are. Copyright © 2016 Khan Academy. All Rights Reserved.