This annuity calculator finds the future value of regular payments (what a series of deposits grows to) or the present value (what a series of future payments is worth today). Enter the payment, rate and period — contributions and interest are split out for you.
What Is an Annuity?
An annuity is a series of equal payments at regular intervals — monthly deposits into a savings plan, a pension’s monthly check, lottery winnings paid over years, or an insurance product that converts a lump sum into an income stream. Valuing that stream is one of finance’s core skills, and it runs on two formulas this calculator handles. It is part of our Finance Calculators collection.
The Two Annuity Formulas
- Future value: FV = PMT × [((1 + r)ⁿ − 1) ÷ r] — what regular payments grow to
- Present value: PV = PMT × [(1 − (1 + r)⁻ⁿ) ÷ r] — what future payments are worth today
where r is the per-period rate and n the number of payments.
Worked Example (Verified)
Deposit $200/month for 20 years at 6%: you pay in $48,000, and the future value is $92,408 — interest contributes $44,408, nearly doubling your money. Run it in PV mode instead and the same payment stream at a 6% discount rate is worth $27,916 today — the number a lump-sum buyout offer should be compared against.
Annuity vs. the Products Sold as “Annuities”
- The mathematics here applies to any level payment stream — including the accumulation inside a 401(k) Calculator‘s projection and the payments evaluated by the Retirement Calculator.
- The insurance products (fixed, variable, indexed annuities) wrap this math in contracts with fees, surrender periods and guarantees — value the underlying payment stream here first, then judge whether the wrapper is worth its cost.
- Ordinary annuity vs annuity due: payments at period end (this calculator) vs period start (worth slightly more — multiply the result by (1 + r) for the due version).
Under the hood an annuity is a geometric series of Compound Interest terms — each payment compounds for its own remaining time.
Related Tools
- Compound Interest Calculator
- 401k Calculator — annuity math with employer match
- Retirement Calculator
Frequently Asked Questions
How is an annuity calculated?
Future value: PMT × [((1+r)ⁿ − 1)/r]. Present value: PMT × [(1 − (1+r)⁻ⁿ)/r], with r the per-period rate and n the number of payments.
What is the difference between future value and present value?
Future value asks what payments become after growing with interest; present value asks what future payments are worth in today’s dollars after discounting. Same stream, opposite directions in time.
What is an annuity due?
The same stream paid at the start of each period (rent is the classic example). It is worth (1 + r) times the ordinary annuity value.
Is a pension an annuity?
Yes — a defined-benefit pension is a life annuity: payments for as long as you live. Its PV with this calculator approximates the lump-sum value insurers use (they also model life expectancy).
What rate should I use for present value?
Your opportunity cost — what the money could earn elsewhere at similar risk. Higher discount rates make distant payments worth less today.
Is this annuity calculator free?
Yes — free, instant, no sign-up. It values payment streams; it is not a recommendation about any insurance product.