Calculate the future value (accumulation) or present value of an annuity based on regular payments, interest rate, and term.
Our free annuity calculator finds either the future value (how much a series of regular payments will grow to) or the present value (what a series of future payments is worth today) of an annuity. It supports both ordinary annuities (payments at the end of each period) and annuities due (payments at the beginning), common in retirement planning, loan structuring, and insurance products.
Future Value (Ordinary) = PMT × [ (1 + i)^n − 1 ] / i
Present Value (Ordinary) = PMT × [ 1 − (1 + i)^-n ] / i
Where PMT is the payment amount, i is the interest rate per period, and n is the total number of periods. For an annuity due (payments at the start of each period), both formulas are multiplied by an additional factor of (1 + i), since each payment earns one extra period of interest.
In an ordinary annuity, payments are made at the end of each period (common for loans and bonds). In an annuity due, payments are made at the beginning of each period (common for rent and insurance premiums), which slightly increases both future and present value since each payment earns interest for one extra period.
Future value tells you how much a series of regular contributions, like retirement savings deposits, will grow to by a future date, accounting for compound interest on each payment.
Present value tells you what a stream of future payments, like a pension, structured settlement, or loan, is worth today in a single lump sum, which is useful for comparing offers or valuing income streams.
More frequent payments (monthly versus annual) generally result in a higher future value for the same total annual contribution, since money is invested and starts earning interest sooner and more often throughout the year.