PVIFA Calculator
Calculate Present Value Interest Factor of Annuity for investment analysis
Calculate PVIFA
Annual interest rate or discount rate
Number of payment periods
PVIFA Results
Formula used: PVIFA = [1 - (1 + r)^(-n)] / r
Effective rate per period: 0.0000%
Total payments: $0.00
PVIFA Analysis
Example Calculation
Investment Scenario
Question: What is the PVIFA for 8 annual payments at 4% interest?
Interest Rate: 4% per year
Number of Periods: 8 years
Payment Amount: $3,000 per year
Calculation Steps
Step 1: Apply the PVIFA formula
PVIFA = [1 - (1 + r)^(-n)] / r
PVIFA = [1 - (1 + 0.04)^(-8)] / 0.04
PVIFA = [1 - (1.04)^(-8)] / 0.04
PVIFA = [1 - 0.7307] / 0.04
Result: PVIFA = 6.7327
Present Value Calculation
Present Value = Payment × PVIFA
Present Value = $3,000 × 6.7327
Present Value = $20,198
This means receiving $3,000 annually for 8 years is equivalent to receiving $20,198 today at 4% interest.
PVIFA Quick Reference
| Periods | 3% | 4% | 5% |
|---|---|---|---|
| 1 | 0.9709 | 0.9615 | 0.9524 |
| 2 | 1.9135 | 1.8861 | 1.8594 |
| 3 | 2.8286 | 2.7751 | 2.7232 |
| 5 | 4.5797 | 4.4518 | 4.3295 |
| 10 | 8.5302 | 8.1109 | 7.7217 |
Use calculator for precise values with custom inputs
PVIFA Concepts
PVIFA Formula
[1 - (1+r)^(-n)] / r
Interest factor for annuity streams
Present Value
Payment × PVIFA
Current worth of future payments
Time Value
Money today vs. future
Higher rates = lower PVIFA
Common Applications
Retirement Planning
Value pension payments
Loan Analysis
Calculate loan present value
Investment Valuation
Compare investment options
Education Funding
Value scholarship payments
Business Decisions
Evaluate cash flow streams
Understanding PVIFA (Present Value Interest Factor of Annuity)
What is PVIFA?
PVIFA (Present Value Interest Factor of Annuity) is a financial factor used to calculate the present value of a series of equal future cash flows (annuity). It represents how much a series of future payments is worth in today's dollars, considering a specific interest rate and time period.
Why Use PVIFA?
- •Investment Comparison: Compare lump sum vs. annuity payments
- •Retirement Planning: Value pension and annuity options
- •Loan Analysis: Calculate present value of loan payments
- •Business Valuation: Evaluate recurring revenue streams
Mathematical Foundation
PVIFA Formula
PVIFA = [1 - (1 + r)^(-n)] / r
Where: r = interest rate per period, n = number of periods
Present Value of Annuity
PV = Payment × PVIFA
Total present value of all future payments
Key Insight: Higher interest rates and more periods generally increase PVIFA, but the relationship is not linear due to discounting effects.
PVIFA vs. Other Financial Factors
PVIFA
Present value factor for equal payments (annuity)
PVIF
Present value factor for single payment (lump sum)
FVIFA
Future value factor for annuity payments