Final answer:
To calculate the present value of an investment, you can use the formula: PV = FV / (1 + r)^n, where PV is the present value, FV is the future value, r is the discount rate, and n is the number of years.
Step-by-step explanation:
To calculate the present value of an investment, you can use the formula: PV = FV / (1 + r)^n, where PV is the present value, FV is the future value, r is the discount rate, and n is the number of years. In this case, the future value is $1,000, the discount rate is 5%, and the number of years is 2. Plugging these values into the formula, we get:
PV = 1000 / (1 + 0.05)^2 = $907.03
Therefore, the present value of your investment is $907.03.