present value


Definition of present value

: the sum of money which if invested now at a given rate of compound interest will accumulate exactly to a specified amount at a specified future date

Examples of present value in a Sentence

Recent Examples on the Web The $126 million in premium payments the district received are effectively the present value of the above-market interest payments voters will be making on the debt in coming decades. oregonlive, "School districts harvest hundreds of millions in extra dollars on bond measures with limited accountability to voters," 5 Aug. 2020 Removing one or two years of a company’s near-term earnings stream does almost nothing to a net-present value calculation. Adam Seessel, Fortune, "Which companies’ stocks will thrive after the coronavirus crash?," 22 Apr. 2020 Estimates on the losses being imposed by Argentina varied widely, partly because the net present value of this year’s offer can’t be precisely calculated without knowing exit yields. Scott Squires,, "As Creditors Blast Argentina’s Offer, Bond Prices Start to Rise," 7 May 2020 Newsletter Sign-up When discount rates go down, companies’ pension debt grows because the present value of future payments rises. Mark Maurer, WSJ, "CFOs Could Change Pension Accounting Style to Avoid Drag on Earnings," 26 Feb. 2020 Much obsessed over by debt investors, duration technically measures how the present value of a bond’s future cash flows—a sum that equals the bond’s market price—is apportioned over time. Sam Goldfarb, WSJ, "The Hidden Factor Making Junk Bonds Less Risky," 26 Jan. 2020 In terms of net present value, that’s more than matched by a $1 billion bump in synergies. Washington Post, "Oxy Faces a Heavyweight in Anadarko Prize Fight," 25 Apr. 2019 It’s hard to see how their present value covers the $2.8 billion premium to Cypress’s recent average market capitalization. Alex Webb | Bloomberg, Washington Post, "Infineon Is Late to Its Own M&A Party," 4 June 2019 The Georgetown study follows a more sweeping analysis by the center using federal data to calculate net present value to estimate return on investment at more than 4,500 colleges and universities across the country. Susan Svrluga,, "Is a liberal arts education a practical investment or waste of money? You might be surprised.," 14 Jan. 2020

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'present value.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of present value

1831, in the meaning defined above

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The first known use of present value was in 1831

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Last Updated

12 Aug 2020

Cite this Entry

“Present value.” Dictionary, Merriam-Webster, Accessed 14 Aug. 2020.

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