 What is more valuable to you? Let me ask you this. $1,000 today or $1,000 one year from now? Now, if you answer today, we admit that time has value. So what exactly is the value of $1,000 one year from now? Well, traditionally, this is done by discounting, I'm putting that in quotations, the payment by the prevailing rate of interest. So let's assume that the prevailing rate of interest is 5%.