Annuity Calculator
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What Your Result Means
- Present Value (PV): The lump sum today that would be equivalent to receiving all your future annuity payments, discounted at the given interest rate. Useful for comparing a lump-sum buyout to periodic payments.
- Future Value (FV): The total accumulated value of all payments plus compounded interest at the end of the final period. This is what you'd have if you invested each payment at the stated rate.
- Total Payments: The simple sum of all payments (PMT × n) before any interest or compounding.
- Interest Earned: The difference between future value and total payments — the amount generated purely by compounding.
How This Calculator Works
You enter the payment amount, annual interest rate, number of periods, payment frequency, and whether payments occur at the end (ordinary) or beginning (due) of each period. The tool converts the annual rate to a per-period rate, then applies the standard present-value and future-value annuity formulas. For annuities due, both values are multiplied by (1 + i) to account for the extra compounding period. This models a pure time-value-of-money annuity, not an insurance product.
Quick Questions
What is the difference between ordinary and due?
An ordinary annuity makes payments at the end of each period (most loans and bonds work this way). An annuity due makes payments at the beginning (rent and insurance premiums are common examples). Due annuities are worth slightly more because each payment earns one extra period of interest.
When would I use present value vs. future value?
Use present value when you want to know what a stream of future payments is worth today — for example, comparing a pension lump-sum offer to monthly checks. Use future value to project how much a series of regular savings deposits will grow to over time.
Is this the same as an insurance annuity?
No. This calculator models a mathematical annuity — a series of equal payments at fixed intervals. Insurance annuities add mortality credits, surrender charges, fees, and guarantees that materially change the economics. Always compare a product contract's actual terms.
What interest rate should I use?
Use the rate that matches your scenario: the discount rate for valuing future cash flows, the expected return for savings projections, or the quoted rate on an annuity product. Make sure the rate aligns with the payment frequency you selected.
Sources
- SEC Investor.gov — Annuities (annuity types and investor guidance)
- CFPB — Annuities (consumer protection guidance on annuity products)
Method & review
Estimate only. Results reflect your inputs and standard formulas — they are not financial, tax, legal, health, or investment advice. Verify important decisions with a qualified professional.