There are no financial functions in Excel to find the PVIFA - present value interest factor of an ordinary annuity in amount of $1 that pays i% interest for n number of periods. The PVIFA is widely used in finance to find things such as present value of an ordinary annuity that makes end of period payments. Finding PVIFA in Excel is made possible by using 3rd party tadPVIFA function that comes with tadXL add-in for Excel 2007, 2010, and 2013. Here me Abraham A. will take you on a guided tour to find the PVIFA in Excel.
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PVIFA - is an acronym for present value interest factor of an ordinary annuity in amount of $1 that makes n payments and pays i% interest. The PVIFA calculation using paper and pencil are time consuming and error prone thus one would desire to find this amount using Excel. But Excel has no PVIFA function not unless we make use of 3rd party tadXL add-in for Excel 2007, 2010, and 2013. There are a large number of financial functions in tadXL including tadPVIFA that find this interest amount. It has some additional features such as use of different compounding frequencies of interest and the use of periods with varying lengths. Additionally you can specify the discounting convention of your choice such as mid-year discounting.
Before we proceed to find present value annuity factor in Excel, you would need the tadXL add-in which is available for download here. There are different versions of this add-in i.e. v0.5, v1.0, v2.0 and v2.5 and you would have to select one of them for installation.
The present value annuity factor Excel function requires the following values as input:
=tadPVIFA ( rate, nper, compounding, period, distribution )
You can download a copy of present value annuity factor template here.
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