Discussion
Discounting a future sum to the present means
Answer: B
Correct answer: dividing it by one plus the rate raised to the number of periods
\[ P = \frac{F}{(1+i)^n}. \] Discounting is compounding run backwards, and it asks what sum invested today would grow into the future amount. Multiplying instead of dividing is the standard slip, and it gives an answer larger than the future sum rather than smaller.
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