Observe that as "t" increases the present value of each cash flow at "t" decreases. For example, the final incoming cash flow has a future value of 10,000 at "t" = 12 but has a present value (at "t" = 0) of 3,186.31. The opposite of discounting is compounding. Taking the example in reverse, it is the equivalent of investing 3,186.31 at "t" = 0 (the present value) at an interest rate of 10% compounded for 12 years, which results in a cash flow of 10,000 at "t" = 12 (the future value).