Annuity Calculator
Pick a mode. Present Value finds what a run of equal payments is worth today, Future Value finds what they grow to, and Payment finds the equal payment a lump sum pays out over the periods. Enter the payment or the present value, the interest rate and the number of periods, then choose an ordinary annuity, paid at the end of each period, or an annuity due, paid at the start. Future Value also takes an opening deposit, the sum already in the contract when the payments start.
How to use the Annuity Calculator
- Enter your numbers in the Annuity Calculator above.
- Press the Calculate button to see the result.
- To try other numbers, change any value and press the button again.
The annuity formulas
PV = PMT · (1 − (1 + r)^−n) / r · · · FV = D · (1 + r)^n + PMT · ((1 + r)^n − 1) / r · · · PMT = PV · r / (1 − (1 + r)^−n)
r is the rate per period, n is the number of periods and D is the opening deposit. The calculator applies the rate you enter once per period, so with an annual rate each period is a year. For monthly payments, enter the annual rate divided by 12 and the number of months. An annuity due multiplies PV and the payments' part of FV by (1 + r) and divides the payment by it. The deposit goes in at the start of period 1, so it earns n periods of interest in either type. At 0% the calculator adds up the payments and any deposit, or divides the present value by n.
Worked example
$2,400 a year for 25 years at 4.5%, as an ordinary annuity: FV = 2,400 × ((1.045)^25 − 1) / 0.045 = $106,956.50. You paid in $60,000, so $46,956.50 is interest. Paid monthly instead, $200 a month at 0.375% (4.5% / 12) for 300 periods grows to $110,599.60. Start the yearly version with a $10,000 opening deposit and the deposit grows to 10,000 × (1.045)^25 = $30,054.34, which takes the future value to $137,010.85. You paid in $70,000, so $67,010.85 is interest.
Frequently asked questions
When does the opening deposit start earning?
At the start of period 1, so it earns interest for all n periods, whichever annuity type you pick. The type only moves the payments. In the example, $10,000 at 4.5% for 25 periods grows to $30,054.34 on its own. Only Future Value uses the deposit. Present Value and Payment have no field for it.
What's the difference between fixed and variable annuities?
Fixed annuities pay a guaranteed rate set by the insurer. Variable annuities invest in subaccounts (mutual funds) with returns that vary with market performance. The calculator uses one rate for every period, so it models a fixed rate.
Are annuity earnings taxed?
Earnings inside the annuity grow tax-deferred. Withdrawals are taxed as ordinary income (not capital gains), and pre-59½ withdrawals usually incur a 10% IRS penalty. The calculator takes no tax off.
Does the calculator include fees?
No. It applies the rate you enter and nothing else, so the result comes before any fees, surrender charges or tax. If your contract quotes a rate after fees, enter that rate.