as And now a bit of math (there won't be much, we promise): To formalize the expected monetary return, imagine that an investment will provide an expected return of do immediately, d in one year's time, and so on. Call the discount rate for a particular investment during a particular year rx, where r is the discount rate for the first year, r2 is the discount rate for the second year, and so on. We can combine the expected return and the discount rate into the following PDV formula: d d2 d3 PDV = do + + (1 + r)(1 + r2) (1 + r)(1 + r2)(1 + r3) 1+11 If we assume a constant discount rate r over time, then we get (trust us here): PDV = do W+ dt t (1 + r)t