“Present value interest factor of annuity” is used to determine value returned from an annuity. It is unfeasible to determine the reasonable market valuation for it, as one cannot determine its price.
Some of the common mistakes made at the time of determining it are – one may not consider the impact of inflation, risk related to issuer or investment, and the impact of funding alternatives with desirable risk/reward ratio. Pvifa calculator can be used to get the future value of 1 dollar cash money, which means the outcome, is the present value of $1 annuity. Smart investors can use the factor to know the value of their money today and also the potential for growth over a period of time.