Annuity Calculator
Calculate present and future value of ordinary annuity or annuity due with period-by-period tables.
Calculate present and future value of ordinary annuity or annuity due with period-by-period tables.
The amount of each periodic payment.
Annual discount or growth rate.
Total duration of the annuity.
Ordinary annuity payments occur at the end of each period; annuity due at the beginning.
PMT = periodic payment, r = annual rate, n = number of years. The annuity due factor (1 + r) accounts for payments at the start of each period, making them worth slightly more in present value terms.
PV = PMT × [(1 − (1 + r)^−n) / r] × (1 + r) if annuity dueA pension offering $2,000/month for 20 years at a 5% discount rate has a present value of roughly $302,000. If a lump sum offer exceeds this, the lump sum may be more advantageous.
A $1M lottery prize paid as $50,000/year for 20 years has a present value well below $1M due to the time value of money. Compare this to the advertised lump sum to make an informed choice.
An annuity due is worth slightly more than an ordinary annuity because each payment is received one period earlier, earning an extra period of return.
Uses the standard present value of annuity formula. The annuity due variant multiplies by (1 + r) to shift all payments one period earlier.