How to use Annuity Calculator
An annuity is a series of equal payments made at regular intervals, and this calculator answers the three questions people ask about them: what a stream of payments will be worth in the future, what it is worth today, and what payment is needed to reach a goal or pay off a balance. Whether you are planning retirement income, valuing a pension offer, or sizing a savings plan, the maths is the same time-value-of-money engine. Enter your rate, term, and payment frequency, choose whether payments fall at the start or end of each period, and the tool computes the figure you need.
- Choose what to solve for: future value, present value, or payment.
- Enter the starting amount (or annuity/loan value when solving for payment).
- Set the annual rate, term in years, and payments per year.
- Pick whether payments occur at the start or end of each period.
- Click Calculate to see the result, total paid in, and total interest.
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Future value vs present value of an annuity
The two core annuity questions are mirror images. Future value asks: if I pay in a fixed amount each period at a given rate, what will the balance grow to by the end? Present value asks: what single lump sum today is equivalent to receiving those payments in the future, discounted at that rate? Future value is what savers and retirement planners care about; present value is what you use to judge whether a pension buyout, lottery payout, or settlement offer is fair. Both depend on the same three levers — the periodic rate, the number of periods, and the payment amount — so a small change in the rate or term can move the answer substantially.
| You want to know | Use | Typical question |
|---|---|---|
| What savings grow to | Future value | What will $500/mo become in 20 years? |
| Worth of payments today | Present value | Is this pension offer fair? |
| Payment to hit a target | Payment | What must I pay to clear this loan? |
Ordinary annuity vs annuity due
Timing matters more than people expect. In an ordinary annuity, payments land at the end of each period — this is the default for most loans and bonds. In an annuity due, payments land at the start of each period, which is typical for rent and some insurance products. Because each annuity-due payment sits in the account one extra period, it earns (or is discounted by) one more period of interest, making an annuity due worth slightly more than an otherwise identical ordinary annuity. Over long terms and higher rates the difference compounds into a meaningful gap, so always confirm which timing your real-world product uses before comparing offers.
Worked examples
Retirement saving
Inputs: $10k start · $500/mo · 5% · 20 yr
Result: future value with monthly compounding
Loan payment
Inputs: Solve payment · $20k · 6% · 5 yr · monthly
Result: level monthly payment that amortises the loan
Glossary
- Annuity
- A series of equal payments made at regular intervals over a period of time.
- Future value
- The value a series of payments or a lump sum will grow to by a future date at a given rate.
- Present value
- The value today of money to be received in the future, discounted at a given rate.
- Annuity due
- An annuity whose payments occur at the start of each period, earning one extra period of interest.
Related reading
Frequently Asked Questions
Why use Annuity Calculator?
- Solve for future value, present value, or the payment in one tool
- Support any payment frequency — annual, quarterly, monthly, or weekly
- Handle both ordinary annuities and annuities due (start-of-period payments)
- See total contributions and total interest alongside the headline figure
Common use cases
- Estimating how large a retirement pot regular contributions will grow into
- Valuing a pension or structured-settlement offer as a lump sum today
- Working out the monthly payment that clears a fixed loan over its term
- Comparing a lump-sum payout against an equivalent stream of payments
- Checking how start-of-period versus end-of-period timing changes the result
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