Present Value, Single Amount

Discounting is the procedure of finding what a future sum of money is worth today.

The number of periods corresponds to the number of times the interest is accrued.

Calculating the present value (PV) is a matter of plugging FV, the interest rate, and the number of periods into an equation.

Multi-period investments require an understanding of compound interest, incorporating the time value of money over time.

When considering a single-period investment, n is one, so the PV is simply FV divided by 1+i.