Fixed Annuities
If you know an annuity is discounted at 8% per period and there are 10 periods, look on the PVOA Table for the intersection of i = 8% and n = 10. You will find the factor 6.710. Once you know the factor, simply multiply it by the amount of the recurr...
Present Value of $1 Annuity Table
Another way to think of it is how much an annuity due would be worth when payments are complete in the future, brought to the present. The initial payment earns interest at the periodic rate (r) over a number of payment periods (n). PVIFA is also use...
The present value factor
The time value of money (TVM) is a concept that is fundamental to financial theory. The concept states that a dollar today is worth more than a dollar tomorrow because you can get paid a rate of interest. The cash outflows at subsequent periods are d...