PVIF Calculator · The present value interest factor (PVIF) is a formula used to estimate the current worth of a sum of money that is to be received at ...PVIFCalculatorPVIFCalculatorHome»Bookkeeping»PVIFCalculatorSep18,2020BookkeepingbyAdamHillBehindeverytable,calculator,andpieceofsoftware,arethemathematicalformulasneededtocomputepresentvalueamounts,interestrates,thenumberofperiods,andthefuturevalueamounts.Wewill,attheoutset,showyouseveralexamplesofhowtousethepresentvalueformulainadditiontousingthePVtables.Ifyoudon’thaveaccesstoanelectronicfinancialcalculatororsoftware,aneasywaytocalculatepresentvalueamountsistousepresentvaluetables(PVtables).Adollartodayisworthmorethanadollartomorrowbecausethedollarcanbeinvestedandearnaday’sworthofinterest,makingthetotalaccumulatetoavaluemorethanadollarbytomorrow.Bylettingtheborrowerhaveaccesstothemoney,thelenderhassacrificedtheexchangevalueofthismoney,andiscompensatedforitintheformofinterest.Theinitialamountoftheborrowedfunds(thepresentvalue)islessthanthetotalamountofmoneypaidtothelender.Thetableisusedmuchthesamewayastheothertimevalueofmoneytables.Thepresentvalueinterestfactorisbasedonthekeyfinancialconceptofthetimevalueofmoney.Thistableusuallyprovidesthepresentvaluefactorsforvarioustimeperiodsanddiscountratecombinations.Whileusingthepresentvaluetablesprovidesaneasywaytodeterminethepresentvaluefactor,thereisonelimitationtoit.Interestistheadditionalamountofmoneygainedbetweenthebeginningandtheendofatimeperiod.Themachineisexpectedtohavealifeof5years,andasalvagevalueof$5,000.Annualmaintenancecostswilltotal$20,000.Annualnetcashreceiptsresultingfromthismachinearepredictedtobe$45,000.Thecompany’srequiredrateofreturnis15percent(thisisthesamedataasthepreviousexercise).DeterminethepaybackperiodforthisinvestmentusingtheformatshowninTable8.1“CalculatingthePaybackPeriodforJackson’sQualityCopies”.BecausethePVof1tablehadthefactorsroundedtothreedecimalplaces,theanswer($85.70)differsslightlyfromtheamountcalculatedusingthePVformula($85.73).Theprese