There exists another solution that is "obvious" to "everybody" who has worked in life insurance (or long-term investments in finance): the concept of present va

There exists another solution that is "obvious" to "everybody" who has worked in life insurance (or long-term investments in finance): the concept of present value (PV): > https://en.wikipedia.org/wiki/Present_value https://en.wikipedia.org/wiki/Present_value Without giving a derivation (which you can find easily on the web), the idea is that a gain of 1 USD that you get in 1 year has to be discounted with a factor of (1+i), where i is the (long-term stable) interest rate. For 3 years, the discount factor is, of course, (1+i)^3, i.e. - a gain of 1 USD that materializes in 1 year is worth 1/(1+i) USD today - a gain of 1 USD that materializes in 3 years is worth 1/(1+i)^3 USD today Thus, including this discount factor for a future monetary flow (as in the PV calculation) makes gains that materialize in, say, 1000 years worth less today than those of the same monetary value that materialize (much) earlier.