Chapter 5.4, Problem 6E

Present Value If you invest $P$ dollars (the present value of your investment) in a fund that pays an interest rate of $r$, as a decimal, compounded yearly, then after $t$ years, your investment will have a value of $F$ dollars, which is known as the future value. The discount rare $D$ for such an investment is given by

$D=\frac{1}{{\left(1+r\right)}^t}$

where $t$ is the life, in years, of the investment. The present value of an investment is the product of the future value and the discount rate. Find a formula that gives the present value in terms of the future value, the interest rate, and the life of the investment.