Present Value of $1 Table
Master the time value of money. This generator creates a professional PVIF reference table, showing you exactly how much a future dollar is worth today at various discount rates.
What is a Present Value Interest Factor (PVIF)?
PVIF is a factor used to calculate the current value of a single sum of money to be received in the future. It accounts for the "time value of money" by discounting the future sum at a specific interest rate.
How do I use this table?
Find the intersection of your discount rate (column) and the number of years (row). Multiply that factor by the future amount you expect to receive. For example, if the factor is 0.6139, a future $1,000 is worth $613.90 today.
What is the formula for PVIF?
The formula is: PVIF = 1 / (1 + r)ⁿ, where r is the interest rate (discount rate) and n is the number of periods.
Why do the factors decrease as time increases?
As the time until you receive the money increases, its value today decreases because you are missing out on more potential interest earnings. This is why a dollar received in 20 years is worth less than a dollar received next year.