A walkthrough, end to end.
- 1
Pick a mode: solve for future value, present value, or required periodic payment.
- 2
Enter the other two of (FV, PV, PMT), plus the rate per period and number of periods.
- 3
Choose ordinary annuity (payments at end of period) or annuity-due (payments at start).
Annuity formulas
Future value of an ordinary annuity: FV = PMT × ((1+r)ⁿ − 1) / r. Present value of an ordinary annuity: PV = PMT × (1 − (1+r)⁻ⁿ) / r. Annuity-due multiplies either by (1+r). Foundation of bond pricing, retirement income, and mortgage math.
What you can do with this.
Retirement income annuity
$500K nest egg at 5% withdrawal rate over 25 years → $35K/year sustainable. Computing the PV of $35K over 25 years at 5% rate gives back the $500K. The calculator handles the arithmetic.
Lottery annuity vs. lump sum
$30M jackpot paid as $1.5M/yr over 30 years vs. lump sum. Compute PV of the annuity at your discount rate (5–7% typical) to see which option is mathematically better.
Pension valuation
Pension paying $40K/yr for life. Treat as annuity over expected remaining years; use treasury yield as discount rate to get present value of the pension benefit.
Loan repayment as annuity
Mortgage payment is the PMT in the present value annuity formula, where PV = loan amount. The calculator helps verify a lender's quoted payment matches the math.
Saving for a goal (FV)
Target $200K college fund in 18 years at 7% rate → required monthly savings is the PMT in the FV annuity formula. Solving for PMT gives ~$408/month.
Annuity due vs. ordinary
Annuity-due: payments at the START of each period (rent, lease). Ordinary: payments at the END (most loans, savings deposits). Difference is one extra period of interest — typically ~5–8%.
Variable cash flows
Standard annuity assumes equal payments. For uneven cash flows (real estate with growing rents, etc.), use the IRR or NPV calculator instead.
Annuity calculator 2026 — what's current
Annuity products (insurance contracts) became more attractive after rate hikes. Multi-year guaranteed annuities (MYGAs) offer 4.5–5.5% guaranteed for 3–10 year terms — competitive with CDs and bonds.
Frequently asked.
Finance: any series of equal periodic cash flows. Insurance product: a contract that pays out periodic income, often for life. The math is the same; insurance products add longevity risk pooling and fees.
Compare guaranteed payout to investing the same lump sum yourself. Annuities trade upside for guarantee + longevity protection. Useful as a 'pension replacement' for risk-averse retirees, less so for early-career investors.
Match risk and time horizon. Risk-free annuity (insurance-guaranteed): treasury yield. Investment annuity: expected return of your portfolio. Use the same rate consistently in your comparison.
No. Calculations run entirely in your browser.