Today

I give you $ 100

You pay me $ 100
 Today Next Year
I give you $ 100
You pay me $ 95
r 5%
Compensation for waiting to get money back
Compensation for inflation
Compensation for risk that I won't pay you back
 Today 20 Years from now
I give you ### $ 100
You pay me $ 38
r 5%
 Today 1 2 3 4 5 6 7 8… 50 …
I give you $ 100 $ 100 $ 100 $ 100 $ 100 $ 100 $ 100 $ 100 $ 100
Value today @ r=5% $ 95 $ 91 $ 86 $ 82 $ 78 $ 75 $ 71 $ 68 $ 9
You pay me $ 2,000
 100 …
$ 100
$ 1