Present Value-Annuity Factor

The present value interest factor of annuity (PVIFA)  is used to determine the value of a series of future periodic payments at a given time. The present value of annuity formula relies on the concept of time value of money.

For example, if one gets $1000 today , it will be of more value than getting $100 per month for 10 months. With the lump some today, one could invest it and receive higher returns. 

• P= Period payment
• r = rate of period
• n= number of periods