Present Value of $1 Table Creator
PVIF calculator to create a printable present value of $1 table. Present value is calculated from the formula
where PV is the present value, FV is the future value = $1, i is the interest rate in decimal form and n is the period number. FV is the Future Value (accumulated amount of money = $1) from an investment (PV) at an Interest Rate i% per period for n Number of Time Periods.
You can then look up PV in the table and use this present value factor to calculate the present value of an investment amount.
This factor is known as the Present Value Interest Factor (PVIF). This factor includes the given interest and periods and can now be multiplied by any amount of money to find the cooresponding present value.
Example Use: You want to have $10,000 accumulated in 10 years in an investment account that pays an annual interest rate of 5.25%. What is the present value, the amount you must invest today to achieve your goal?
- Create a table that includes i = 5.25% and n = 10
- Look up PV to find 0.59949
- Use it as a factor to calculate $10,000 * 0.59949 = $5,994.90 which is the amount you must invest today to accumulate enough to have $10,000, future value, after 10 years at 5.25%.
- Use it as a factor to calculate a comparison, say, $10,000 * 0.59949 = $5,994.90 which is the amount you must invest today to accumulate enough to have $10,000, future value, after 10 years at 5.25%.
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