The discounted value of a series of future payments in today’s terms, discounted by some interest rate. An example of Net Present Value would be if someone owes you money – they will pay you back $10 per week for 1 year. After 1 year, you would get $520, but perhaps you do not want to wait this long. Instead, you sell these future payments for someone else for $400 today. That $400 would represent the Net Present Value. In the real world, this is calculated by discounting the future payments by some interest rate.