DEFINITION of 'Present Value Interest Factor  PVIF'
A factor that can be used to simplify the calculation for finding the present value of a series of values. PVIFs can be presented in the form of a table with PVIF values seperated by respective period and interest rate combinations.
The 'r' represents the discount interest rate, and the 't' represents the number of periods.
BREAKING DOWN 'Present Value Interest Factor  PVIF'
Using the PVIF works best when you are attempting to discount one value in the future. For example, assume you are going to receive $5,000 in four years time, with the current discount interest rate being 8%. Using the standard present value formula the calculation would be $5,000 / (1+.08)^{4 }.
This would result in a present value of approximately $3,675.15. By using a PVIF table, an individual can identify the factor for this calculation being 0.73503 (calculated: 1/(1.08^4)). They can then multiply the $5,000 by 0.73503, which results in $3675.15 as well. This is another way to come to the same answer as the standard present value formula, but becomes a useful technique when you are comparing or dealing with a large number of values.

Discounted Cash Flow (DCF)
Discounted cash flow (DCF) is a valuation method used to estimate ... 
Internal Rate Of Return  IRR
A metric used in capital budgeting measuring the profitability ... 
Net Present Value  NPV
Net Present Value (NPV) is the difference between the present ... 
Present Value Of An Annuity
The current value of a set of cash flows in the future, given ... 
Future Value Of An Annuity
The value of a group of payments at a specified date in the future. ... 
Present Value Interest Factor Of ...
A factor which can be used to calculate the present value of ...

Fundamental Analysis
Discounted Cash Flow Analysis
Find out how analysts determine the fair value of a company with this stepbystep tutorial and learn how to evaluate an investment's attractiveness for yourself. 
Investing Basics
Calculating The Present And Future Value Of Annuities
At some point in your life, you may have had to make a series of fixed payments over a period of time  such as rent or car payments  or have received a series of payments over a period of time, ... 
Investing Basics
Understanding The Time Value Of Money
Find out why time really is money by learning to calculate present and future value. 
Personal Finance
How Tech Can Help with 3 Behavioral Finance Biases
Even if you’re a finance or statistics expert, you’re not immune to common decisionmaking mistakes that can negatively impact your finances. 
Technical Indicators
Using Pivot Points For Predictions
Learn one of the most common methods of finding support and resistance levels. 
Investing Basics
5 Tips For Diversifying Your Portfolio
A diversified portfolio will protect you in a tough market. Get some solid tips here! 
Entrepreneurship
Identifying And Managing Business Risks
There are a lot of risks associated with running a business, but there are an equal number of ways to prepare for and manage them. 
Forex Education
Explaining Uncovered Interest Rate Parity
Uncovered interest rate parity is when the difference in interest rates between two nations is equal to the expected change in exchange rates. 
Fundamental Analysis
Using Decision Trees In Finance
A decision tree provides a comprehensive framework to review the alternative scenarios and consequences a decision may lead to. 
Economics
Understanding Tragedy of the Commons
The tragedy of the commons describes an economic problem in which individuals try to reap the greatest benefits from a given resource.

What are the disadvantages of using net present value as an investment criterion?
While net present value (NPV) calculations are useful when you are valuing investment opportunities, the process is by no ... Read Full Answer >> 
What's the difference between net present value and internal rate of return? How ...
Both of these measurements are primarily used in capital budgeting, the process by which companies determine whether a new ... Read Full Answer >> 
Which is a better measure for capital budgeting, IRR or NPV?
In capital budgeting, there are a number of different approaches that can be used to evaluate any given project, and each ... Read Full Answer >> 
Can working capital be too high?
A company's working capital ratio can be too high in the sense that an excessively high ratio is generally considered an ... Read Full Answer >> 
How do I use discounted cash flow (DCF) to value stock?
Discounted cash flow (DCF) analysis can be a very helpful tool for analysts and investors in equity valuation. It provides ... Read Full Answer >> 
When does the fixed charge coverage ratio suggest that a company should stop borrowing ...
Since the fixed charge coverage ratio indicates the number of times a company is capable of making its fixed charge payments ... Read Full Answer >>