Present Value is a financial concept that helps determine how much a future sum of money is worth today. It takes into account the time value of money, which means that a specific amount of money today is worth more than the same amount in the future due to its potential earning capacity. To calculate Present Value, you use a formula that discounts future cash flows back to their value today, considering a specific interest rate. This concept is essential for making informed investment decisions, comparing different financial options, and understanding the impact of interest rates on future earnings.