Present Value of Annuity Calculator
Calculate the present value of an annunity, including due and ordinary annuity. Differnt compound options are also provided. The results also provide total interest and total value.
Click Calculate to see the result
More Information
An annuity is a series of equal cash flows occured at regular time intervals. Examples of annuity are loans, bonds or even mortgages.
Formula
\[\text{PV}=C \times \frac{1-(1+r)^{-n}}{r}\]where
PV = Present Value of Annuity
r = Annual Interest Rate
n = Number of Period
Example - Retirement Saving Plan
John is planning the amount of money required for his retirement. He aims to receive $15,000 per year for 30 years after 65 years old. Assuming the each payment will be distributed at the end of each year and the annual interest rate is 5%, how much money will he need at the age of 65?
First we know the number of period n is 30, each cash flow is $15,000 and interest rate is 5%. Therfore, we could use the above formula to get the result.\[\text{PV}=15000 \times \frac{1-(1+0.05)^{-30}}{0.05}\]To obtain the result by this calculator.
- Enable Compound Option
- Input the corresponding values to each fields
- Input 360 in Months as 30 years x 12 months
- Select Annual in Compound
The answer is $230,586.7