## Answers the Question

How much money is required to repay a loan?

## Calculator for PVIFA

## What Is the PVIFA?

The acronym PVIFA stands for "present value interest factor of annuity."

It is a measure of the value returned from an annuity.

## Why Is it Important?

- Without understanding the present-day value of an annuity, it is impossible to determine a reasonable valuation for it or determine its price.

## Formula(s) to Calculate PVIFA

- PVIFA = (1 - (1 + INTEREST RATE)^-NUMBER OF WITHDRAWALS) / INTEREST RATE

## Common Mistakes

- Not considering the effects of inflation.
- Not considering the reliability of the issuer or the risk of the investment.
- Not considering alternative investments which may present a more desirable risk/reward ratio.