Enter your payment amount, interest rate, number of periods, and payment frequency to calculate the present value of an annuity. Choose between ordinary annuity (payments at end) or annuity due (payments at start) to see the PV, total payments, and a principal vs. interest breakdown.
Present Value of Annuity
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Total Payments
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Total Interest Earned
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Total Number of Payments
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The present value (PV) of an annuity is the current worth of a series of equal future payments, discounted at a given interest rate. It answers the question: how much would you need to invest today to generate those future cash flows? A higher discount rate results in a lower present value.
An ordinary annuity (also called an annuity in arrears) makes payments at the end of each period, while an annuity due makes payments at the beginning. Annuity due payments are worth slightly more in present value terms because each payment is received one period earlier, giving it less time to be discounted.
For an ordinary annuity, the formula is PV = PMT × [1 − 1/(1+i)^n] / i, where PMT is the payment amount, i is the periodic interest rate, and n is the total number of payments. For an annuity due, the result is multiplied by (1 + i) to account for the earlier payment timing.
This calculator is useful whenever you need to value a stream of fixed future payments — for example, when evaluating lottery payouts, pension income, lease obligations, loan repayment schedules, or structured settlement offers. It helps you compare lump-sum alternatives to periodic payment options.
Using a monthly rate of 0.5% (6%/12) and 120 total payments, the present value comes to approximately $90,073. This means you would need to invest about $90,073 today at 6% annual interest to fund 120 monthly payments of $1,000.
More frequent payments (e.g., monthly vs. annually) generally result in a slightly different present value because interest compounds over shorter intervals. Monthly payments also mean each payment is discounted for a shorter period, which can increase the overall present value compared to annual payments of the same total amount.
A perpetuity is an annuity with no end date — it pays forever. The present value of a perpetuity is simply PMT / i. A regular annuity has a finite number of payments, so its present value is always lower than a comparable perpetuity discounted at the same rate.
Yes. Loans and mortgages are structured as annuities where the lender pays a lump sum today (the present value) in exchange for a series of fixed periodic repayments. By entering your payment, rate, and term, you can verify whether a given loan amount matches the expected present value of those repayments.