Annuity Payout Calculator
Free annuity payout calculator. Find monthly or annual income from a lump-sum annuity purchase. Compare payout rates for different terms and interest rates.
Annuity Value Calculator
Free annuity value calculator. Find the present value of an annuity stream using discount rate, payment amount, and term. Supports ordinary, annuity-due, and growing annuity.
$
%
Present Value⧉
$12,462.00
Lump-sum equivalent today
Future Value⧉
$33,066.00
Accumulated at term end
Total Payments⧉
$20,000.00
20 payments
Total Interest⧉
$13,066.00
Growth from compounding
Payments: $20,000.00Interest: $13,066.00
Annuity Type Comparison
| Type | Present Value | Future Value |
|---|---|---|
| Ordinary ← | $12,462.00 | $33,066.00 |
| Annuity Due | $13,085.00 | $34,719.00 |
| Growing (2.0%) | $14,665.00 | $38,912.00 |
Accumulation Schedule
| Period | Payment | Interest | Balance |
|---|---|---|---|
| 1 | $1,000.00 | $0.00 | $1,000.00 |
| 2 | $1,000.00 | $50.00 | $2,050.00 |
| 3 | $1,000.00 | $102.50 | $3,152.50 |
| 5 | $1,000.00 | $215.51 | $5,525.63 |
| 10 | $1,000.00 | $551.33 | $12,577.89 |
| 15 | $1,000.00 | $979.93 | $21,578.56 |
| 20 | $1,000.00 | $1,526.95 | $33,065.95 |
Assumes constant interest rate and regular payments. Actual annuity products may have fees, surrender charges, and variable returns. Consult a financial advisor.
Planning notes, formulas, and examples
About the Annuity Value Calculator
The Annuity Value Calculator computes the present or future value of a stream of equal payments. Whether you're evaluating an insurance annuity, a pension, a structured settlement, or an investment that makes regular payments, this calculator converts that payment stream into a single number.
Supports three annuity types: ordinary annuity (payments at end of period), annuity due (payments at beginning), and growing annuity (payments increase by a fixed rate each period). Enter your payment amount, interest/discount rate, and number of periods to see both present value and future value.
This is a foundational time-value-of-money calculation used across retirement planning, real estate analysis, and investment valuation. By translating a series of payments into a single equivalent amount, you can compare a pension offering $2,000 per month against a lump-sum buyout, assess the true cost of a car lease, or determine how much a structured settlement is worth in today's dollars. This makes it an essential tool for anyone evaluating long-term financial commitments.
When This Page Helps
Converting a stream of payments into a single present or future value lets you compare different financial products, evaluate offers, and make apples-to-apples comparisons. Whether negotiating a settlement, assessing a pension, or valuing an investment, the annuity calculation is essential. Without this conversion, it is nearly impossible to judge whether a series of future payments is fairly priced.
How to Use the Inputs
- Enter the periodic payment amount.
- Set the interest or discount rate per period.
- Enter the number of payment periods.
- Choose annuity type: ordinary, due, or growing.
- For growing annuity, enter the payment growth rate.
- Review both Present Value and Future Value results.
Formula used
Ordinary Annuity PV = PMT × [(1 − (1 + r)^−n) / r]
Ordinary Annuity FV = PMT × [((1 + r)^n − 1) / r]
Annuity Due PV = PV(ordinary) × (1 + r)
Annuity Due FV = FV(ordinary) × (1 + r)
Growing Annuity PV = PMT × [(1 − ((1+g)/(1+r))^n) / (r − g)] (r ≠ g)Example Calculation
Result: PV = $12,462 | FV = $33,066
A $1,000 annual payment for 20 years at 5% has a present value of $12,462 (what you'd pay today for the entire stream) and a future value of $33,066 (what accumulates if each payment earns 5%).
Tips & Best Practices
- Use PV when buying an annuity (what you should pay today). Use FV when saving (what you'll accumulate).
- An annuity due is always worth more than an ordinary annuity because each payment is received one period earlier.
- For monthly payments with an annual rate, divide the rate by 12 and multiply periods by 12.
- A growing annuity with a growth rate close to the discount rate produces a very high present value.
- Use this to evaluate structured settlements, lottery payouts, and recurring income streams.
- The discount rate reflects your opportunity cost — what you could earn investing the money elsewhere.
Time Value of Money Foundation
The annuity formulas are derived from the fundamental principle that a dollar today is worth more than a dollar tomorrow. By discounting future payments at an appropriate rate, we can compare payment streams of different durations and sizes on an equal basis.
Perpetuity Comparison
If the number of periods approaches infinity, an ordinary annuity becomes a perpetuity with PV = PMT / r. For a growing perpetuity (g < r), PV = PMT / (r − g). This is the Gordon Growth Model used in stock valuation.
Real-World Applications
Annuity valuation applies to mortgages (the lender's asset is an annuity), bonds (coupon payments form an annuity), leases, pensions, structured settlements, and systematic investment plans. Understanding annuity math unlocks the core of financial analysis.
Sources & Methodology
Last updated:
Methodology
This worksheet applies the standard present-value and future-value annuity formulas to the payment amount, periodic rate, number of periods, and timing option entered by the user. For annuity-due mode it shifts the ordinary-annuity result forward one period, and for growing-annuity mode it uses the standard growth-adjusted present-value relationship before compounding that value forward to the term end.
It is a constant-rate finance-math worksheet, not a product-pricing engine. The page does not model taxes, credit risk, insurer charges, or changing discount rates, so the result should be used as a clean mathematical comparison rather than as a contract quote.
Sources
- Compound Interest Calculator (Investor.gov / U.S. Securities and Exchange Commission) — Official investor-education reference for time-value-of-money and compounding mechanics used in the annuity calculations.
- Annuities (Investor.gov / U.S. Securities and Exchange Commission) — SEC investor education overview describing annuity structures and periodic payment streams.
Frequently Asked Questions
Present value is what the entire payment stream is worth today in a lump sum. Future value is what the accumulated payments will be worth at the end of the term. PV is used for buying/valuing; FV is used for savings planning.
In an ordinary annuity, payments occur at the END of each period (like most loan payments). In an annuity due, payments occur at the BEGINNING (like rent or insurance premiums). Annuity due values are higher by a factor of (1 + r).
A growing annuity has payments that increase by a fixed percentage each period. This models pension payments with COLA, salary that grows annually, or dividends that grow. The growth rate must be less than the discount rate for the PV formula to converge.
Convert the annual rate to monthly by dividing by 12. Convert years to months by multiplying by 12. For example, 6% annual for 10 years becomes 0.5% per period for 120 periods.
Use your expected investment return for savings/accumulation scenarios. For valuation of an income stream, use a rate reflecting the risk of the payments: Treasury rates for government-backed (low risk), or higher rates for corporate or personal annuities.
Yes. Lottery winners often choose between a lump sum and annual payments. This calculator finds the present value of the annuity option so you can compare. Typically the lump sum offered is less than the PV at reasonable discount rates.
More in this topic
Immediate Annuity Calculator
Free immediate annuity calculator. Estimate monthly income from a single premium immediate annuity (SPIA). Compare payouts by age, gender, and joint-life options.
Pension Value Calculator
Free pension value calculator. Estimate the present value of your pension annuity. Compare lump-sum equivalent with COLA adjustments and discount rate analysis.