Calculate annuity future value, present value, and payouts. Compare ordinary annuity vs annuity due with payment schedules and growth charts.
Ordinary Annuity: Payments are made at the end of each period. Most common for loans and savings.
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An annuity is a series of equal payments made at regular intervals over a specified period. Whether you're planning retirement income, saving for a future goal, or evaluating a lump-sum investment, understanding annuity calculations is essential for sound financial planning. This annuity calculator helps you determine the future value of your savings contributions, the present value of a stream of future payments, the periodic payment needed to reach a financial goal, or the payout you'll receive from a lump-sum investment. It supports both ordinary annuities (payments at end of period) and annuities due (payments at beginning of period), with flexible payment frequencies from monthly to annually.
An annuity is a financial product or mathematical concept involving a series of equal payments made at regular intervals. In finance, annuities come in several forms: fixed annuities offer guaranteed interest rates and predictable payments; variable annuities tie returns to investment performance; and indexed annuities link returns to a market index. Annuities can be immediate (payouts begin right away) or deferred (payouts begin at a future date). The two fundamental types used in calculations are the ordinary annuity, where payments occur at the end of each period, and the annuity due, where payments occur at the beginning. Understanding these distinctions is crucial for accurate financial planning, whether you're computing loan payments, retirement income, or investment returns.
Future Value of Ordinary Annuity
FV = PMT × [(1 + r)ⁿ - 1] / rInstantly see how payment timing affects your total returns. An annuity due typically yields a higher future value because each payment earns interest for one additional period.
Determine exactly how much monthly income a lump-sum investment will generate over your retirement years, accounting for interest rates and payment frequency.
Whether saving for college, a home, or retirement, find the exact periodic payment needed to reach your target amount within your desired timeframe.
Visualize how compound interest amplifies your savings over time with step-by-step formulas, growth charts, and detailed payment schedules for complete transparency.
Estimate how much monthly income a $100,000, $250,000, or $500,000 lump sum will generate over 15, 20, or 30 years of retirement using the Payout mode.
Calculate the monthly contribution needed to build a college fund of $100,000 or $200,000 over 18 years using the Future Value or Payment mode.
Determine the current value of a series of future payments — useful for evaluating lottery payouts, structured settlements, or pension buyout offers.
Students can verify annuity calculations for homework and exams with step-by-step LaTeX formulas showing the complete solution process for PV, FV, and PMT problems.
A $100,000 annuity's monthly payout depends on the interest rate and payout period. At 5% interest over 20 years, an ordinary annuity pays approximately $659.96 per month. At 4% over 15 years, the monthly payout is about $739.69. Use the Payout mode to calculate your specific scenario with different rates and durations.
To receive $1,000 per month, the required lump sum depends on the interest rate and payout duration. At 5% interest over 20 years, you would need approximately $151,525. At 4% over 25 years, you would need about $189,452. Use the Present Value mode with a $1,000 monthly payment to calculate the exact amount for your situation.
An ordinary annuity makes payments at the end of each period (e.g., most loan payments and bond coupons), while an annuity due makes payments at the beginning (e.g., rent, insurance premiums). An annuity due has a slightly higher future value because each payment earns interest for one additional period. The formulas differ by a factor of (1 + r).
The present value of an ordinary annuity is calculated using: PV = PMT × [1 - (1 + r)^(-n)] / r, where PMT is the periodic payment, r is the periodic interest rate, and n is the total number of periods. For an annuity due, multiply the result by (1 + r). This formula discounts each future payment back to today's value.
The future value of an ordinary annuity is: FV = PMT × [(1 + r)^n - 1] / r, where PMT is the periodic payment, r is the periodic interest rate (annual rate divided by payments per year), and n is the total number of periods (years times payments per year). For an annuity due, the formula adds a (1 + r) multiplier.
Annuities have several potential drawbacks: high fees and surrender charges that reduce returns, limited liquidity since early withdrawals incur penalties, complexity of variable and indexed products, potential inflation risk with fixed annuities, and tax treatment of gains as ordinary income rather than capital gains. Always compare annuity returns to alternative investments.
A $300,000 annuity payout varies by rate and period. At 5% over 20 years, the monthly payout is approximately $1,979.89. At 4% over 25 years, it's about $1,583.54 per month. Over 15 years at 5%, you'd receive approximately $2,372.38 monthly. Use the Payout mode to model your exact scenario.
Yes, annuity payments are generally taxable, but the treatment depends on how the annuity was funded. If purchased with pre-tax dollars (qualified annuity, like from a 401k), the entire payment is taxed as ordinary income. If purchased with after-tax dollars (non-qualified), only the earnings portion is taxed — the return of your original investment (cost basis) is tax-free. Consult a tax professional for your specific situation.