Present Value Annuity Calculator

A Present Value Annuity Calculator is the same concept as an Annuity Calculator, since a simple annuity calculation’s whole purpose is helping us find the „present value“ of a regular series of future payments and thus the present value of an ordinary annuity. The same is the case with an Annuity Payout Calculator. For the concept of an annuity calculation it does not matter whether you are calculating the present value of cash inflows (receiving payments) or outflows (making payments). The overall value result is going to be the same. The difference will be that you are either going to own or owe the present value of the annuity (amount of money that you come up with through the calculation).

The following annuity calculator will help you figure out the present value of your future payments. It is at the same time an Annuity Rates Calculator since it will let you figure out the interest rate of your annuity provided you fill in the right data variables. Just fill in three of the four fields in the following table with your data and leave one of the four fields blank. It will be calculated for you as you hit the "calculate".

Present Value Annuity Calculator*

Fixed payment amount:	e.g. 400 ($)
Number of payments:	e.g. 12 (payments)
	monthly payments yearly payments
Yearly fixed interest rate (%):	e.g. 9.9 (%)


Present value of the annuity:




*Enter any of the three values and leave the one field empty and click "Calculate".

An annuity is a series of regular future payments with a clear agreement on the amount of the regular payment, an interest rate, since interest payments are usually required on loaned money, and a time horizon, i.e. by what date the full amount has to be paid back to the creditor.
Good examples for annuities are car leases or mortgage payments since they fulfill the above mentioned criterias. The annuity calculator works by the following implemented Present Value of Annuity Formula:

Present Value Annuity Formula

Present Value of Annuity

C:        amount of fixed payment
r:         interest rate (annuity rate)
t:         number of payments

Present Value Annuity Example

Let us assume that you went and got a mortgage loan on your home. By signing a contract you received immediate money on your hand, which is nice, but you also had to commit to and are now obliged to make future regular payments to the bank who loaned you the money, until the full debt plus interest has been paid back completely.

So what is a present value annuity calculation now good for? Let us think about the bank’s role for a second. How would it be able to know how much money it could give you in the first place if it received your future regular payments.
Somehow the bank has to evaluate what your future payments are worth to them now, in the present, although they have not received any of your payments yet. The present value annuity calculation or just in short annuity lets you do exactly this.

Let us assume you went for a 30-year mortgage. This would result in 30 x 12 = 360 future payments. Let us assume you got a fixed yearly interest rate of 4.5% and you will have to make regular payments of 1000 dollars every month. The annuity now lets us calculate what your contract is worth to the bank. It is very important that you do not use monthly payments with a yearly annuity rate. You will either have to adjust the annuity payments to the annuity rate or vice versa or you will come up with the wrong result. In the above annuity calculator this adjustment is made by clicking the appropriate button of either monthly or yearly payments. Adjusting the payments to the annuity rate is actually more simple. In this way we got 30 payments of 12'000 dollars (12 x 1'000 dollars).