This paper proposes an efficient FFT algorithm for the Psycho-Acoustic Model (PAM) of MPEG-4 AAC. The proposed algorithm synthesizes FFT coefficients using MDCT and MDST coefficients through circular convolution. The complexity of the MDCT and MDST coefficients is approximately half of the original FFT. We also design a new PAM based on the proposed FFT algorithm, which has 15% lower computational complexity than the original PAM without degradation of sound quality. Subjective as well as objective test results are presented to confirm the efficiency of the proposed FFT computation algorithm and the PAM.