The present value interest factor is
A)always less than 1.0.
B)always more than 1.0.
C)assumes simple interest.
D)always between 1.0 to 2.0.

Question

Quizplus · Accepted Answer

The present value interest factor (PVIF) is a factor used to calculate the present value of a future sum of money. It is always less than 1.0 because it represents the discounting of a future value to its present value by applying a certain interest rate. If it were more than 1.0, it would mean that the future value is worth more than the present value, which is not possible.

The Present Value Interest Factor Is