Present Value of Annuity Calculator
Use this present value of annuity calculator to estimate what a stream of future payments is worth today.
Last updated:
Results
- Present value
- $15,443.47
- Total future payments
- $20,000.00
- Discount difference
- $4,556.53
Formula
PV = PMT × [1 − (1 + r)^(−n)] / r
Annuity due: PVdue = PV × (1 + r)
How to calculate
- Enter the amount of each payment.
- Enter the discount rate per period.
- Enter the number of payments.
- Apply the present value of annuity formula.
- If payments are at the beginning of each period, use the annuity due adjustment.
Worked example
$2,000/year for 10 years at 5%: PV = 2,000 × [1 − (1.05)^(−10)] / 0.05 ≈ $15,443.47.
Frequently asked questions
What is the present value of an annuity?
It is the value today of equal payments that will be received in the future.
Why use present value instead of total payments?
Because receiving money in the future is not the same as having money today.
What is annuity due?
An annuity due means payments occur at the beginning of each period.
Who uses this calculation?
It is commonly used in retirement, insurance, business valuation, and settlement comparisons.
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This tool is for educational and planning purposes only.