PV - Present Value The present value of a given investment is the amount of today's dollars that will grow to equal the future value of that given investment. It is the best way of comparing investments. However, the calculation of the present value requires an assumed interest rate, usually taken as the "risk-free rate of return". See section Before Investing for an exhaustive explanation.
Risk-free rate of return The interest rate that is free from fears of default, etc.
Usually taken as the rate of U.S. government bonds for the time period that one is
concerned about. Thus if you are considering a 6 month investment, the risk-free rate
of return for that is the 6 month U.S. T-bill rate. For a 30 year investment, it would be
the 30 year U.S. bond.