Discounting: Understanding Present Value

This lecture delves into the concept of discounting, exploring how different discount rates impact the present value of future cash flows. The instructor explains the power of compound interest rates, the importance of considering discount rates in financial decisions, and the implications of discounting in the context of climate change. The lecture also touches on the intergenerational trade-offs involved in discounting, the sensitivity of projects to varying discount rates, and the diverse perspectives on determining the appropriate discount rate for public projects.