The present value of a future amount of money is the amount​ that

would have to be invested today at a given interest rate over a specified period of time to equal the future amount.

Explanation:

One of the reasons for calculating present value of a future amount is to know how much value of money has changed over a period of time.

It also allows various investors make an informed decision with some level of accuracy on the profit that would be earned in the future when money is placed on different investment today.

It is the sum of money if invested today, yields certain amount of money at a given rate of interest over a specified period.

Examples of instruments traded are treasury bonds and bills.