Annuity Calculator

by
Annuity Calculator
Future Value (FV)Present Value (PV)Payment Amount (PMT)
MonthlyQuarterlyAnnually
Results:
Total Value = $ 0.00
function calculateAnnuity(){var type=document.getElementById('calc_type').value;var pmt=parseFloat(document.getElementById('pmt_val').value);var annualRate=parseFloat(document.getElementById('rate_val').value)/100;var years=parseFloat(document.getElementById('years_val').value);var freq=parseInt(document.getElementById('freq_val').value);var isDue=document.getElementById('annuity_due').checked;if(isNaN(pmt)||isNaN(annualRate)||isNaN(years)){alert('Please enter valid numeric values');return;}var r=annualRate/freq;var n=years*freq;var result=0;var label="";var totalContributed=0;if(type==="fv"){label="Future Value";result=pmt*((Math.pow(1+r,n)-1)/r);if(isDue)result*=(1+r);totalContributed=pmt*n;}else if(type==="pv"){label="Present Value";result=pmt*((1-Math.pow(1+r,-n))/r);if(isDue)result*=(1+r);totalContributed=pmt*n;}else if(type==="pmt"){label="Periodic Payment";var fv_target=pmt;result=fv_target/( ((Math.pow(1+r,n)-1)/r) * (isDue?(1+r):1) );totalContributed=result*n;}document.getElementById('resLabel').innerHTML=label;document.getElementById('resultValue').innerHTML=result.toLocaleString(undefined,{minimumFractionDigits:2,maximumFractionDigits:2});var totalInt=type==="pmt"?(pmt-(result*n)):(result-totalContributed);document.getElementById('extraInfo').innerHTML="Total Payments: $"+totalContributed.toLocaleString(undefined,{minimumFractionDigits:2,maximumFractionDigits:2})+"
Total Interest: $"+Math.abs(totalInt).toLocaleString(undefined,{minimumFractionDigits:2,maximumFractionDigits:2});document.getElementById('answer').style.display='block';}

How to Use the Annuity Calculator

The annuity calculator is a professional-grade financial tool designed to help you determine the future value, present value, or required payment for a series of equal payments made at regular intervals. Whether you are planning for retirement, calculating a structured settlement, or determining the growth of a savings plan, this tool provides precise mathematical results based on standard financial formulas.

What do you want to calculate?
Choose between Future Value (how much you'll have), Present Value (how much it's worth today), or Payment Amount (how much you need to save).
Periodic Payment
The amount of money paid or received in each period (e.g., $500 per month).
Annual Interest Rate
The nominal yearly interest rate (APR) expressed as a percentage.
Annuity Due vs. Ordinary Annuity
Select 'Annuity Due' if payments occur at the beginning of each period (common for leases). Leave it unchecked for 'Ordinary Annuity' where payments occur at the end (common for loans/dividends).

The Annuity Formula

To calculate the Future Value (FV) of an ordinary annuity, we use the following mathematical expression:

FV = PMT × [((1 + r)^n – 1) / r]

  • PMT: Amount of each period's payment
  • r: Periodic interest rate (Annual Rate / Periods per year)
  • n: Total number of periods (Years × Periods per year)

If you are calculating an Annuity Due, the entire result is multiplied by (1 + r) because each payment earns interest for one additional period.

Calculation Example

Example Scenario: You decide to contribute $200 every month into a retirement account for the next 20 years. The account earns an average annual interest rate of 7%. How much will you have at the end of the term?

Step-by-step solution:

  1. Identify PMT: $200
  2. Identify annual rate: 7% (0.07)
  3. Calculate periodic rate (r): 0.07 / 12 = 0.005833
  4. Calculate total periods (n): 20 years × 12 months = 240
  5. Apply formula: FV = 200 × [((1 + 0.005833)^240 – 1) / 0.005833]
  6. Result: $104,185.33

Common Questions

What is the difference between a fixed and variable annuity?

A fixed annuity offers a guaranteed interest rate for a specific period, making it predictable and safe. A variable annuity allows you to invest in sub-accounts (similar to mutual funds), meaning the value can fluctuate based on market performance. This annuity calculator is primarily used for fixed-rate projections.

Why does the payment timing (Due vs Ordinary) matter?

Annuity Due payments occur at the start of the period. Because the money is deposited sooner, it has more time to compound interest. Over a long period, like 30 years, selecting "Annuity Due" can result in a significantly higher future value than an "Ordinary Annuity" with the same monthly amount.

Can I use this for my 401k or IRA?

Yes! If you contribute a fixed amount regularly to a retirement account, this tool functions as a 401k growth calculator. Simply input your monthly contribution as the PMT and your expected average stock market return as the interest rate.

Leave a Comment