PVIFA is the present value interest factor of ordinary annuity worth $1 that earns i% interest rate for n number of periods. Here me Abraham A. will provide you with a study guide to explain and illustrate present value interest factor of ordinary annuity worth $1.
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PVIFA is an acronym for present value interest factor of an ordinary annuity on which an interest of i% is due for n number of periods. The PVIFA may be better understood when you see it from a perpective of a borrower who has to repay loan amount of $X by making periodic end of period payments in amount of $1 each for n number of periods. The interest is paid not just on the loan amount but also on the interest that is paid in previous periods. The compounding frequencies of interest vary from annual compounding to daily compounding where a maximum amount of interest is due using continuous compounding of interest. Here I present you with a PVIFA document as a Word file that explains the topic in detail starting with defining the PVIFA, showing you various PVIFA formulas and illustrating PVIFA calculations using a number of compounding frequencies of interest. This document is a must have for anyone studying financial management or those who are working as professional analysts.
|1||PVIFA Value Pack||$19|
The "Value Pack" gives away not just the PVIFA guide but it also offers you tadXL v0.8 add-in for Excel 2007, 2010 and 2013. This Excel add-in is a collection of 14 financial functions that find different interest rates including the PVIFA. Excel does not have a PVIFA function of its own and thus the tadPVIFA function makes it easy to find present value interest factor of ordinary annuity in amount of $1 at i% interest rate for n periods using Excel. A simple Excel PVIFA formula looks like this =tadPVIFA(10%, 10) but there are more options built into this function that permit use of various compounding frequencies of interest, use of payment periods that are of varying lengths, and different discounting methods such as mid-year discounint convention. The range of compounding frequencies include daily, weekly, fortnightly, monthly, quarterly, semi-annual, annual or even infinite and biennial compounding of interest. The payment periods may range from a day, week, fortnight, month, quarter, half-year, year or even biennial. Thus if the payments are made weekly and compounding is daily then an Excel PVIFA formula would be =tadPVIFA(10%, 10, 1/365, 1/52) where 1/365 denote daily compounding of interest and 1/52 denotes weekly payments. Thus the "Value Pack" offers more value for your money and is a must have resource for anyone studying financial management and those who are working as professional analysts.
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