The "intrinsic value" of a stock or bond is essentially the present value of all the dividends or interest payments it will pay out in the future. If the calculated PV is higher than the current market price, the investment is considered undervalued. Conclusion
Over time, the purchasing power of currency tends to erode. A gallon of milk will likely cost more in five years than it does today. Foundations and Applications of the Time Value ...
The "rent" earned on the money, usually expressed as an annual percentage. Time (n/t): The number of compounding periods. The "intrinsic value" of a stock or bond