1. The problem is to find the present value (PV) of a future amount of money. 2. The formula for present value is $$PV = \frac{FV}{(1 + r)^n}$$ where $FV$ is the future value, $r$ is the interest rate per period, and $n$ is the number of periods. 3. This formula discounts the future amount back to the present by accounting for the interest rate over time. 4. To solve, identify the future value, interest rate, and number of periods. 5. Substitute these values into the formula and calculate the denominator first. 6. Divide the future value by the calculated denominator to get the present value. 7. This tells you how much a future sum is worth in today's terms.