Which of the following equations represents the present value (PV)of a discounted future amount (FA)at a discount rate (i)for multiple periods (n)?
A) $ P V=F V /(1-i)^{n} $
B) $ P V=F A^{*}(1-i)^{n} $
C) $ P V=F A /(1+i)^{n} $
D) $ P V=F A^{*}(1+i)^{n} $

Question

​Which of the following equations represents the present value (PV)of a discounted future amount (FA)at a discount rate (i)for multiple periods (n)? 
A) $ P V=F V /(1-i)^{n} $
B) $ P V=F A^{*}(1-i)^{n} $
C)​ $ P V=F A /(1+i)^{n} $
D) $ P V=F A^{*}(1+i)^{n} $

Quizplus · Accepted Answer

The equation for present value of a discounted future amount for multiple periods is PV = FA/(1+i)^n, where PV is the present value, FA is the future amount, i is the discount rate, and n is the number of periods. Option C is the correct representation of this equation. Option A represents the formula for future value, not present value, and Option B and D include an additional factor not necessary for the calculation of present value.

​Which of the Following Equations Represents the Present Value (PV)of PV=FV/(1−i)n P V=F V /(1-i)^{n} PV=FV/(1−i)n

Which of the Following Equations Represents the Present Value (PV)of $P V=F V /(1-i)^{n}$