How do you calculate Pvifa in finance?

The initial deposit earns interest at the interest rate (r), which perfectly finances a series of (n) consecutive withdrawals and may be written as the following formula: PVIFA = (1 – (1 + r)^-n) / r.

What is Pvifa in bond value?

Present Value Interest Factor of Annuity
Present Value Interest Factor of Annuity, i.e., PVIFA, is an element used to estimate the. To put it another way, PVIFA is a number that represents the present value of the payment series. The commencing payment earns interest at a specific rate (r) above a series of periods for the payments (n).

How to calculate pvifa for interest rate period?

PVIFA = (1- (1+r)^-n)/r, where. r = interest rate. n = number of period. For example, to calculate the PVIFA for interest rate 4% and a period of 15, you would plugin the numbers to the PVIFA formula as follows. PVIFA = (1- (1+0.04)^-15)/0.04) = 11.1184.

What does pvifa stand for in annuity formula?

PVIFA stands for the present value interest factor of an annuity. It is a metric that can be used to calculate a number of annuities’ present value. The initial amount earns interest at a regular rate r, which funds a series of n successive withdrawals. Let’s explore the formula to calculate PVIFA in the next section.

How to do a pvifa table in Excel?

How to do PVIFA table in excel? The below table was created using excel. To replicate this table, set up the desired periods and interest rates and then use the cell formula in the 1 x 1 location (shown bold below) as = (1- (1+$B$2)^ (-A3))/ ($B$2). Afterward, drag the formula to the right and then down to fill the tables.

How to calculate the present value of the interest factor?

The formula for calculating the present value interest factor of annuity is as follows: PVIFA = (1-(1+r)^-n) / r. Where r is the interest rate per period ; n is the number of periods; PVIFA Definition. What is PVIFA? PVIFA is defined as the present value of the interest factor of an annuity.