Chapter A, Problem A.21BE

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:

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

To calculate: The number of periods K would receive $1,300.