Present value(现值) Suppose you can pay now to obtain $1 at the start of next period What is the most you should pay? $1? No. If you kept your $1 now and saved it then at the start of next period you would have $(1+r)>$1,so paying $1 now for $1 next period is a bad dealPresent Value （现值） Suppose you can pay now to obtain $1 at the start of next period. What is the most you should pay? $1? No. If you kept your $1 now and saved it then at the start of next period you would have $(1+r) > $1, so paying $1 now for $1 next period is a bad deal