What is present value?Present Value
What a future amount of money is worth today after discounting at an interest rate.
Learn “present value” in an animated lesson
- Bonds & Fixed IncomeDuration and Interest Rate Risk
For the same 1% rise in rates, a 10-year bond falls far more than a 1-year bond. Duration measures exactly this sensitivity.
- Bonds & Fixed IncomeThe Price–Yield Seesaw
When market interest rates rise, older bonds fall in price. Use a seesaw to see the most important rule in bonds.
- Bonds & Fixed IncomeYield to Maturity (YTM)
Buy at today's price and hold to maturity: what's your annual return really? YTM counts both the coupons and the price difference.
- Interest Rates & SwapsSwap P&L and Valuation
Once rates move after signing, the swap's value changes. Drag the rate and see whether the payer or the receiver comes out ahead.
Related terms
See how “present value” works for yourself with an animation you can drag and play.
Go to “Duration and Interest Rate Risk”