Terms uses :

PV = Present Value;

A = Annuity;

r = interest rate;

g = growth rate;

n = number of periods;

CF = Cash Flow;

 

“A bird in the hand is worth two in the bush” – Miguel de Cervantes

 

If someone owes you 10,000/- , it is advantageous to get the money today If you get this money today:
–> You could earn interest and invest it and you will receive this quantity plus some other amount in the future.
–> You can use it to pay your debts and therefore, lower the interest amount paid on your debt.
–> Or you can spend it and enjoy it as you wish.

 

More on Time Value of Money here…