09-28-2016, 12:49 PM
Present value of that $1 is less than $1 if spent five years from now. You could invest the $1 now in something that pays more than 0%, and five years from now you'll have more than $1. Or to look at it the other way, you could invest maybe $0.90 to get to $1 five years from now, so the present value is $0.90.