Chapter A, Problem A.19BE

To determine

Present value: This is the amount of future value reduced or discounted at a rate of interest till particular current date.

Formula to compute present value:

$\begin{array}{l}\text{Present}\\ \text{value}\end{array}\}\text{=}\left\{\text{Future value ×}\left(\begin{array}{l}\text{Present value factor of}\\ \text{\$1 at interest rate for time periods}\end{array}\right)\right\}$

To calculate: The number of periods T must wait to receive an amount of $75,000.