The formula to calculate the Present Value Interest Factor of Annuity (PVIFA) is:
\[ \text{PVIFA} = \frac{1 - (1 + r)^{-n}}{r} \]
Where:
PVIFA is defined as the present value of the interest factor of an annuity. This factor is often used to determine the present value of an ordinary annuity or a series of annuities. This is done by multiplying a recurring payment by the factor.
Let's assume the following values:
Using the formula to calculate the Present Value Interest Factor of Annuity (PVIFA):
\[ \text{PVIFA} = \frac{1 - (1 + 0.05)^{-10}}{0.05} \approx 7.7217 \]
The Present Value Interest Factor of Annuity is approximately 7.7217.
