Why is the interest rate in a time value of money calculation sometimes referred to as the discount rate?

In time value of money calculations, the interest rate is often referred to as the discount rate because it reflects the opportunity cost of capital over time. The discount rate is used to convert future cash flows into their present value, capturing the concept that money available today is worth more than the same amount in the future due to its potential earning capacity. Essentially, it discounts future amounts to account for risk and inflation, allowing for informed investment decisions.