Present Value Of Annuity Calculator
Calculate the present value of a series of equal future payments (annuity) given a fixed interest rate and number of periods.
Published by:
isCalculator Editorial Team
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How to use this tool?
This calculator computes the present value of an ordinary annuity—the current worth of a series of equal future payments, given a fixed interest rate per period.
- Enter Payment per Period ($): The fixed amount paid each period (e.g., $1,000). Must be a positive number.
- Enter Interest Rate per Period (%): The periodic interest rate (e.g., 5 for 5%). Use the rate that matches your payment frequency (e.g., monthly rate if payments are monthly). Must be a positive number.
- Enter Number of Periods: The total number of payments (e.g., 10 for 10 years of annual payments). Must be a positive integer.
- Click "Calculate": The present value appears in green, along with the formula and step-by-step calculation.
Note: All inputs must be positive. The result shows the lump sum you would need today to generate the annuity payments at the given rate and periods.
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Frequently Asked Questions
The present value of an annuity is the current value of a series of future payments, discounted at a specific interest rate.
Use the formula: PV = PMT × (1 - (1 + r)^-n) / r, where PMT is the payment per period, r is the interest rate per period, and n is the number of periods.
An ordinary annuity has payments at the end of each period, while an annuity due has payments at the beginning. This calculator assumes ordinary annuity.
