Present Value (PV): Current dollar value of a future amount

Future Value (FV): Value of present amount at a future date

APR/Quoted Rate/Nominal Rate: Annual rate - NOT periodic rate (unless period is 1 year)

Discounted Cash Flow (DCF): Find the price of an asset in a competitive market

1. Identify cash flows that result from owning the asset
2. Determine discount rate required to compensate the investor for risk of holding asset
3. Find PV of cash flows from step 1 using discount rate from step 2

The Timeline