To the left are a couple of numerical examples. The PV of $100 received in one year is lower when the interest rate is 10% than when its 5%. This makes perfect sense. If the interest rate is 10% you would only need to invest $90.90 today to receive $100 in a year, but if you can only earn 5% you would need to invest $95.24.

    If we're going to evaluate the worth of capital which generates revenue for several periods in the future we must be able to value revenue in todays dollars which will be received more than one year in the future. Let's start with $100 received in two years.

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