In economics, Present value interest factor, also known by the acronym PVIF, is used in finance theory to refer to the output of a calculation, used to determine the monthly payment needed to repay a loan.
The calculation involves a number of variables, which are set out in the following description of the calculation: Let: Then: where In its simplest form, PVIF is calculated using the formula: where
r
is the discount rate (or interest rate) and
is the number of periods.