Annuity Calculator
Calculate the present or future value of an annuity
Enter values to calculate
What is the Annuity Calculator?
An annuity is a series of equal payments made at regular intervals, either you pay into one (like a retirement annuity) or you receive payments from one (like a pension or structured settlement). This calculator handles both directions: it can tell you what regular payments are worth as a lump sum today (present value), or what a lump sum invested today will grow to if drawn down as periodic payments (future value). Financial planners, retirees comparing payout options, and anyone evaluating pension vs. lump sum offers use this kind of tool regularly.
How Does It Work?
There are two core calculations depending on your situation.
Present Value of an ordinary annuity (what future payments are worth today):
PV = PMT × [1 − (1 + r)^−n] / r
Future Value (what regular deposits will be worth over time):
FV = PMT × [((1 + r)ⁿ − 1) / r]
PMT = Payment amount per period
r = Interest rate per period
n = Total number of payment periods
How to Use CalciHub's Annuity Calculator
1. Choose whether you're calculating present value or future value.
2. Enter the payment amount per period.
3. Input the interest or discount rate per year.
4. Set the number of years (or periods).
5. Select payment timing: ordinary annuity (payments at end of period) or annuity due (payments at beginning).
Tip: The "annuity due" option adds slightly more value than ordinary annuity because each payment has one extra period to compound. It's a small difference short-term, but meaningful over 20+ years.
A Quick Example
David is offered a structured settlement from an insurance claim: $1,500 per month for 20 years. He wants to know what that stream of payments is worth today at a 5% discount rate, to decide whether to take the lump-sum offer of $220,000 instead.
Monthly payment: $1,500
Annual rate: 5% (0.4167% per month)
Number of periods: 240 months
Present Value: approximately $226,800
The monthly payments are worth more in today's dollars than the $220,000 lump sum, so David should probably take the payments, assuming he doesn't need the cash immediately.
Frequently Asked Questions
An ordinary annuity makes payments at the end of each period — most loans and bonds work this way. An annuity due makes payments at the beginning of each period, like a lease or insurance premium. The annuity due is worth slightly more because payments arrive (or are invested) one period earlier.
It depends on your health, life expectancy, other income, and how you'd invest the lump sum. Monthly payments protect against outliving your money and are simpler to manage. A lump sum gives more control and is better if you expect to invest aggressively or if your health is poor. The present value calculation is exactly what you need to compare them.
The discount rate reflects what you could earn by investing the money elsewhere – essentially your opportunity cost. For pension valuations, companies often use a rate close to long-term Treasury bond yields. For personal decisions, using 4–6% is a reasonable range for conservative to moderate investors.
Not at all. Structured settlements, mortgage payments, car loans, and lease agreements are all technically annuities. Any series of equal, regular payments qualifies. The calculator is useful for all of them, not just retirement planning.
Yes, free with no limitations. Run as many scenarios as you need to compare your options.
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