Present Value
/ˈprɛzənt ˈvæljuː/
Definitions
- (n.) The current worth of a future sum of money or stream of cash flows given a specified rate of return.
The court considered the present value of future damages in the compensation award.
- (n.) In legal contexts, the discounted amount calculated to determine the value today of payments or benefits payable in the future under a contract or judgment.
The settlement was based on the present value of the annuity to be paid over ten years.
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Commentary
Present value calculations are critical in quantifying financial rights or obligations in contract law, tort damages, and estate valuation; clear specification of the discount rate and assumptions is essential in drafting and litigation.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.