Editing Present value (section)

=====Technical details=====
Present value is [[Additive inverse|additive]]. The present value of a bundle of [[cash flow]]s is the sum of each one's present value. See [[time value of money]] for further discussion.
These calculations must be applied carefully, as there are underlying assumptions:
* That it is not necessary to account for price [[inflation]], or alternatively, that the cost of inflation is incorporated into the interest rate; see [[Inflation-indexed bond]].
* That the likelihood of receiving the payments is high — or, alternatively, that the [[default risk]] is incorporated into the interest rate; see [[Corporate bond#Risk analysis]].
(In fact, the present value of a cashflow at a constant interest rate is mathematically one point in the [[Laplace transform]] of that cashflow, evaluated with the transform variable (usually denoted "s") equal to the interest rate. The full Laplace transform is the curve of all present values, plotted as a function of interest rate. For discrete time, where payments are separated by large time periods, the transform reduces to a sum, but when payments are ongoing on an almost continual basis, the [[Compound interest#Continuous compounding|mathematics of continuous functions]] can be used as an approximation.)