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PVIFA Calculator

# Present Value Interest Factor of Annuity Calculator

PVIFA is an abbreviation for **Present Value Interest Factor of Annuity**. It is an idea based on the time value of money. The PVIFA Equal to 1 number of value less than numbers of value 1 added the interest rate period (%) less than numbers of periods years divided to r interest rate per period (%) .

**The formula us,**

PVIFA = (1 – (1 + r)-n) / r

**let us consider,**

- PVIFA is the present value interest factor of annuity.
- r is the interest rate per period, expressed as a decimal; and
- n is the number of periods (years).

Example For PVIFA

eight payments of $2,000 – one per year. The interest rate equal to 3%.

- Determine the number of periods and interest rate. In this case, we have n = 8, and r 3% = 0.03
- Calculate PVIFA according to the PVIFA formula:PVIFA = (1 – (1 + r)-n) / rPVIFA = (1 – (1 + 0.03)-8) / 0.03
PVIFA is = 7.99

- How much is the payment worth, then? The total value of these eight payments will not be equal to simply 8 * $2000. Instead, we have to multiply the payment value by the PVIFA:7.99 * $2,000 = $15,980
- The present value of this annuity is equal to $15,980.