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# PVIFA Calculator

Write the no. of period and interest rate per period and hit on the calculate button to get the value of PVIFA

Table of Contents:

## PVIFA Calculator

PVIFA calculator is a tool that simplifies the calculation to find the present value of a series of annuities. This calculator usually requires at least two variables: the interest rate per period (r), and the number of periods (n).

## What is PVIFA?

It is a financial concept used to calculate the present value of a series of future cash flows, known as an annuity. The PVIFA represents the value today of a stream of cash flows to be received over a specified period, taking into account the interest rate or discount rate.

The PVIFA is derived from the present value formula, which calculates the present value of a future cash flow by discounting it back to the present using a specific interest rate. The PVIFA simplifies this process by providing a factor that can be multiplied by the periodic cash flow to determine its present value.

**The formula for PVIFA**

PVIFA = (1 - (1 + r)^{-n}) / r

**Where:**

- r is the interest rate per period
- n is the number of periods

## Examples

**Example 1:**

Evaluate the preset value interest factor (PVIFA) when r = 23% and n = 12.

**Solution**

**Step 1:**

r = 23%, n = 12, PVIFA =?

**Step 2:**

**Formula:**

PVIFA = (1 - (1+r)^{-n}) / r

**Step 3:**

**First of all, we have to divide r by 100 to remove %:**

r = 23% / 100%

r = 0.23

**Step 4:**

**Now putting values in the above formula:**

PVIFA = (1 - (1+0.23)^{-12}) / 0.23

PVIFA = (1 - (1.23)^{-12}) /0.23

PVIFA = (1 - (0.083394740712096)) / 0.23

PVIFA = 0.9166052592879 / 0.23

PVIFA = 3.9852402577735

**Example 2:**

Evaluate the preset value interest factor (PVIFA) when r = 34% and n = 6.

**Solution**

**Step 1:**

r = 34%, n = 6, PVIFA =?

**Step 2:**

**Formula:**

PVIFA = (1 - (1+r)^{-n}) / r

**Step 3:**

**First of all, we have to divide r by 100 to remove %:**

r = 34% / 100%

r = 0.34

**Step 4:**

**Now putting values in the above formula:**

PVIFA = (1 - (1+0.34)^{-6}) / 0.34

PVIFA = (1 - (1.34)^{-6}) / 0.34

PVIFA = (1 - (0.17273136690427)) / 0.34

PVIFA = 0.82726863309573 / 0.34

PVIFA = 2.4331430385169