Identify the Correct Equation for Calculating the Present Value of an Investment

Multiple Choice

Identify the correct equation for calculating the present value of an investment. (Assume 'r' stands for rate of return and 'n' stands for number of periods interest is earned.)

A) Present value = Future value × (1 + r) ⁿ
B) Present value = Future value + (1 + r) ⁿ
C) Present value = Future value - (1 + r) ⁿ
D) Present value = Future value / (1 + r) ⁿ
E) Present value = Future value / ((1 + r) × n)