The equation to solve for present value (PV) is:

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PV=C(1+r)tPV=C(1+r)t

In this equation, C is the promised future payment, r is the interest rate and t is number of periods during which we are collecting interest. We can substitute the values that we are given to find:

PV=1000(1+0.10)PV=1000(1+0.10)

PV=909PV=909

Thus, the present value of $1,000 one year in the future with a 10% interest rate is $909.