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What is the formula for PVIFA?

Updated: 9/13/2023
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PVIFA = (1 - 1 / (1 + r)n) / r where n is the number of payment periods; r is the nominal interest rate for one period

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Q: What is the formula for PVIFA?
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What is the formula for PVIFA in Excel?

The PVIFA formula in excel refers to Present Value Interest Factor of Annuity. This is able to be calculated in an excel document.


How do you calculate PVIFA using financial calculator?

How to calculate PVIFA, or Present Value Interest Factor of an Annuity, depends on your particular financial calculator. In general, you input the information you have using the Present Value function and the calculator will use factor tables to generate an answer.


When do you use fvif and fvifa?

An Annuity is a series of payments of a fixed amount for a specified number of equal length periods When the FV of an annuity is known, and you need to calculate the value of each payment, or the FVIFA, then: FVIFA = Future Value Interest Factor Annuity FVIFA = ((1 + r)t -1)/r FVA = Future Value of an Annuity FVA = PMT x (FVIFA r, t) * where: PMT = Regular payments r = discount rate - (interest rate of your choosing) t = number of periods (time) of annuity - (number of years for example) When the PV of an annuity is already known, and you need to calculate the value of each payment, or the PVIFA, then: PVIFA = Present Value Interest Factor Annuity PVIFA = ((1/r) - 1/r(1+r)t ) PVA = Present Value of an Annuity PVA = PMT x (PVIFA r, t) * where: PMT = Regular payments r = discount rate - (interest rate of your choosing) t = number of periods (time) of annuity - (number of years for example)


How do you calculate PVIFA for example r 10 n 10years?

PIVFA=(1-(1/(1+R)^n)/R PIVFA(10%10)=(1-(1/(1+0.1)^10)/0.1=6.1446


When do you use pvifa and fvifa?

FVIFA is used in the following situations: a. What will be the accumulated savings if the annual savings is Rs.X for a given period? b. How much should we save annually to get a lump sum amount after a certain period of time? c. For redemption of debentures, how much should a firm deposit annually in sinking fund account to accumulate the redemption amount? PVIFA is used in the following situations: a. How much should i borrow for a particular EMI? b. How to calculate loan amortization schedule? c. How much should we invest for a certain period of time in order to make systematic withdrawal every month/year?


If you purchase a zero coupon bond today for 225 and it matures at 1000 in 11 years what rate of return will you earn on that bond to the nearest 10th of 1 percent?

Po =I (PVIFA kdn) + M(PVIF kdn) = $225 = $ 1,000 (PVIF) note 1 = 0 since this is a zero coupon bond. (PVIFkd, ) =0.317


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