Interest Factor for n = 1

D

The interest factor represents the value of money over time based on a specific interest rate and time period. There are two types of interest factors, present value interest factor (PVIF) and future value interest factor (FVIF). PVIF is used to calculate the present value of a future cash flow, while FVIF is used to calculate the future value of a present cash flow.

PVIF and FVIF can be further broken down into two subcategories: single-payment interest factor (SPIF) and annuity interest factor (AIF). SPIF is used when there is only one cash flow at the end of the time period, while AIF is used when there are multiple cash flows over the time period.

When n = 1, it means there is only one cash flow at the end of the time period. Therefore, we are dealing with a single-payment interest factor (SPIF).

The interest factor equals one for any positive rate of interest when n = 1. This means that the future value of a single cash flow is equal to the present value of that cash flow, regardless of the interest rate.

Since we are dealing with a single cash flow, the answer must be either PVIF or FVIF. Since we know that the future value is equal to the present value, the correct answer is PVIF, which represents the present value interest factor for a single cash flow.

Therefore, the correct answer is A. PVIF.