Discounting calculates the present value of future money using a discount rate. This principle reflects the time value of money, meaning money today is more valuable than the same amount in the future because it can earn interest.

In capital budgeting, discounting calculates the profitability of long-term projects by finding the net present value (NPV). For bonds, discounting finds the present value of future interest payments and final repayment, helping investors decide if a bond is priced fairly. In retirement planning, discounting estimates the present value of future retirement benefits or savings for better financial planning. In environmental economics, discounting assesses the present value of long-term benefits and costs, guiding investments in sustainable projects. In legal fields, discounting calculates the present value of future damages or settlements in personal injury and wrongful death cases, ensuring fair compensation.

For example, when valuing a bond, future interest payments (coupons) and the final repayment amount (par value) are reduced by a specific interest rate to find their worth today. For businesses, an asset is valuable only if it will produce cash in the future. By applying a discount rate, we can determine what those future cash flows are worth today's money.

タグ
DiscountingPresent ValueFuture MoneyTime Value Of MoneyNet Present Value NPVCapital BudgetingBondsRetirement PlanningEnvironmental EconomicsCash Flow ValuationInterest RateFinancial PlanningSustainable InvestmentsLegal Compensation

章から 5:

article

Now Playing

5.6 : Discounting

Time Value of Money

165 閲覧数

article

5.1 : Introduction to Time Value of Money

Time Value of Money

2.2K 閲覧数

article

5.2 : Future Value

Time Value of Money

196 閲覧数

article

5.3 : Present Value

Time Value of Money

211 閲覧数

article

5.4 : Simple Interest

Time Value of Money

194 閲覧数

article

5.5 : Compound Interest

Time Value of Money

160 閲覧数

article

5.7 : Future Value and Compounding

Time Value of Money

126 閲覧数

article

5.8 : Present Value and Discounting

Time Value of Money

3.0K 閲覧数

article

5.9 : Annuity

Time Value of Money

160 閲覧数

article

5.10 : Perpetuity

Time Value of Money

160 閲覧数

article

5.11 : Effect of Annuity Due on Investments

Time Value of Money

101 閲覧数

article

5.12 : Time Value of Money and Business

Time Value of Money

143 閲覧数

JoVE Logo

個人情報保護方針

利用規約

一般データ保護規則

研究

教育

JoVEについて

Copyright © 2023 MyJoVE Corporation. All rights reserved