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
- 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.