The use of future value to calculate the present value is called:

A) compounding.
B) the annuity method.
C) discounting.
D) present value approach.

Compounding

The process where the value of an investment increases because the interest it earns itself earns interest.

Discounting

The process of determining the present value of a payment or series of payments that will be made in the future, often used in finance to compare investment opportunities.