“Present value interest factor of annuity” is used to determine the value returned from an annuity. It is unfeasible to determine a 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, 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 some time.