Use this calculator to determine the future value of an annuity, the present value of an annuity, or the periodic payment required to reach a specific future value goal. An annuity involves a series of equal payments made at regular intervals.
Calculate Future Value
Calculate Present Value
Calculate Required Payment
Annually
Semi-Annually
Quarterly
Monthly
Understanding Annuities
An annuity is a financial product that pays out a fixed stream of payments to an individual, typically used as an income stream for retirees. However, the term "annuity" also refers to a series of equal payments made at regular intervals over a specified period. These payments can be made into an account (like a retirement fund) or received from an account (like a pension payout).
Key Components of an Annuity Calculation
Periodic Payment Amount: This is the fixed amount of money paid into or out of the annuity at each interval (e.g., $1,000 per month).
Annual Interest Rate: The annual rate of return or discount rate applied to the annuity. This rate determines how much your money grows over time.
Number of Years: The total duration over which the annuity payments are made or received.
Compounding Frequency: How often the interest is calculated and added to the principal. Common frequencies include annually, semi-annually, quarterly, or monthly. This significantly impacts the total growth of your annuity.
Types of Annuity Calculations
Our calculator can perform three primary types of annuity calculations:
Future Value of an Annuity
This calculation tells you how much a series of regular payments will be worth at a specific point in the future, assuming a certain interest rate and compounding frequency. It's useful for planning savings goals, such as retirement or a large purchase.
Example: If you contribute $500 per month to an annuity for 20 years at an annual interest rate of 6% compounded monthly, what will be the total value of your annuity at the end of 20 years?
Present Value of an Annuity
This determines the current lump-sum value of a future series of payments. In other words, how much money you would need today to generate a specific stream of future payments. This is often used in legal settlements, pension valuations, or when evaluating investment opportunities that promise future income streams.
Example: How much money would you need to invest today, earning 4% annually, to receive $2,000 per quarter for the next 15 years?
Required Payment for a Future Value Goal
This calculation helps you determine the periodic payment amount you need to make to reach a specific financial goal by a certain future date, given an interest rate and compounding frequency. It's excellent for setting realistic savings targets.
Example: You want to accumulate $250,000 in 15 years for a down payment on a house. If your investment can earn an average of 7% annually, compounded quarterly, how much do you need to save each quarter?
How to Use the Calculator
Select Calculation Type: Choose whether you want to find the Future Value, Present Value, or the Required Payment.
Enter Details: Fill in the relevant fields based on your chosen calculation type. For example, if calculating Future Value, you'll enter the Periodic Payment, Rate, Years, and Compounding Frequency. If calculating Required Payment, you'll enter the Desired Future Value instead of the Periodic Payment.
Click "Calculate Annuity": The result will appear below the button, showing the calculated value in dollars.
This free annuity calculator provides a straightforward way to estimate these values, helping you make informed financial decisions.
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