Calculation details
Planning estimate only, not financial, tax, or legal advice. Verify assumptions and current rules before making decisions.
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Use this result
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What does this calculator estimate?
An annuity is a series of equal payments made at regular intervals — like a retirement payout or a savings plan. This calculator computes either the future value (what the payments grow to) or the present value (what that stream is worth today). Enter the payment, rate, and period count to see it.
- Annuity = a stream of equal payments over time
- FV = payment × [((1+r)^n − 1) ÷ r]
- Supports future-value and present-value modes
What an annuity measures
An annuity is a sequence of equal payments at regular intervals. The future value tells you what those payments grow to at a given return; the present value tells you what the whole stream is worth today. It's the math behind pensions, retirement plans, and fixed savings schedules.
Limitations to watch for
Annuities often carry fees and surrender charges that the calculator ignores — real products rarely deliver the headline return. The result is very sensitive to the assumed rate; a half-percent change moves the number a lot. Payments are assumed on time and the rate constant, which real products don't guarantee.
How to use it in practice
Use the future value to model a savings schedule and the present value to understand a retirement income stream. Shop the fee and the rate together — an annuity with a higher fee can turn a seemingly good rate into a poor one. Compare against a simple low-cost portfolio before committing.
- Enter the payment amount per period.
- Enter the rate per period and the total number of periods (or years × periods/year).
- Choose future-value or present-value mode to get the result.
What an annuity is
An annuity is a series of payments: an investment that pays a fixed income, or a loan repaid in installments. The calculator models the payment, present value, or future value from the inputs.
Present value of payments
The present value of a payment stream discounts each payment: $1,000 monthly for 20 years at 6 percent is worth about $139,600 today. The discount rate is the opportunity cost — the calculator applies it.
Future value of savings
The future value of regular deposits compounds each one: $500 monthly at 6 percent for 30 years grows to about $502,000. The same math that prices annuities projects savings goals.
A worked example
A $200,000 lump sum at 5 percent paying monthly for 25 years supports about $1,168 monthly. The calculator returns the payment from the principal, rate, and term.
Guarantees and costs
Annuity products add guarantees, fees, and surrender charges that the pure math ignores. The calculator models the financial core; the product's fees and features decide whether the real-world version matches.
How this calculator works
Formula
Future value of an annuity = payment × [((1 + r)^n − 1) ÷ r], where r is the per-period rate and n is the number of periods, for an ordinary annuity (payments at end of period). The tool supports future-value and present-value modes.
Worked example
An annuity with a $500 monthly payment earning 6% annually (0.5% monthly) over 20 years (240 periods): future value ≈ $500 × [((1.005)^240 − 1) ÷ 0.005] ≈ $500 × 462.04 ≈ $231,020.
Assumptions to verify
- Payments are made at the end of each period (ordinary annuity).
- A single constant per-period rate is assumed.
- Fees, taxes, and surrender charges are not included.
Frequently asked questions
What is an annuity?
A series of equal payments made at regular intervals. It's the underlying math of pensions, retirement payouts, and fixed contribution plans.
How do I calculate future value?
FV = payment × [((1 + r)^n − 1) ÷ r], where r is the per-period rate and n is the number of periods.
What is the difference between future and present value?
Future value is what the payment stream grows to; present value is what that stream is worth today at a given discount rate.
Are annuities a good investment?
It depends. The headline rate can look good, but fees, surrender charges, and lower liquidity often make a low-cost index portfolio a better choice. Compare the total cost carefully.
What rate should I use?
Use a realistic expected return. For the per-period rate, divide the annual rate by the number of periods per year (e.g. 6% ÷ 12 = 0.5% monthly).
Does this include fees?
No. An annuity's real return is reduced by fees and charges, so the calculator overstates what you'd actually keep.
What is an ordinary annuity vs annuity-due?
An ordinary annuity pays at the end of each period; annuity-due pays at the start. Annuity-due has a slightly higher value because payments earn interest sooner.
How do I calculate annuity payments?
Present value × the annuity factor for the rate and term.
Is an annuity product the same as the math?
Products add fees and guarantees — the calculator is the financial core.
Cite this tool
BoringToolsKit. “Annuity Calculator.” boringtoolskit.com/annuity-calculator/ (reviewed 2026-08-25). Free to reference in articles, syllabi, and answer posts with a link.
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