Calculator
Example Data Table
| Scenario | Payment | Rate (%) | Periods | Type | Growth (%) | Future Value |
|---|---|---|---|---|---|---|
| Retirement Savings | 1,000 | 8.00 | 10 | Ordinary | 0.00 | 0 |
| Rent Payments | 2,500 | 6.50 | 12 | Due | 0.00 | 0 |
| Growing Tuition Fund | 900 | 7.25 | 16 | Ordinary | 2.00 | 5,000 |
Formula Used
Ordinary Annuity
PV = PMT × [1 - (1 + r)^(-n)] / rAnnuity Due
PVdue = PVordinary × (1 + r)Growing Annuity
PV = PMT × [1 - ((1 + g) / (1 + r))^n] / (r - g)Discounting a Lump Sum
PV of Future Value = FV / (1 + r)^nThis calculator supports ordinary annuities and annuity dues. It also handles optional payment growth and an optional lump sum.
Ordinary annuity payments arrive at period ends. Annuity due payments arrive at period beginnings. Beginning payments receive one less discounting period.
How to Use This Calculator
- Enter the payment amount made each period.
- Enter the annual discount rate as a percentage.
- Choose the total number of payment periods.
- Enter a payment growth rate if payments rise.
- Add an optional future lump sum if needed.
- Select ordinary annuity or annuity due timing.
- Choose whether to display the detailed schedule.
- Press calculate to show results above the form.
- Use the export buttons for CSV and PDF files.
Frequently Asked Questions
1. What is the present value of an annuity?
It is the current worth of future payments discounted by a required rate. It helps compare payment streams received across different times.
2. What is the difference between ordinary annuity and annuity due?
Ordinary annuity payments occur at period ends. Annuity due payments occur at period beginnings. Because due payments arrive earlier, their present value is usually higher.
3. Why does payment timing matter?
Earlier cash flows are discounted less. That means a payment received today or sooner is worth more than the same payment received later.
4. Can this calculator handle growing payments?
Yes. Enter a growth rate to model payments that increase each period. This is useful for rent, tuition, subscriptions, or salary-linked deposits.
5. What does compounds per year change?
It converts the annual rate into a periodic discount rate. More compounding periods usually change the effective discounting used in present value calculations.
6. Why include an optional future value?
Some plans include regular payments plus a final lump sum. This field lets you discount that extra amount and add it to the annuity present value.
7. What does the schedule table show?
It lists each period’s cash flow, discount factor, present value, and cumulative total. This makes the discounting process transparent and easier to audit.
8. When should I use this calculator?
Use it for loans, leases, pensions, tuition plans, savings targets, and investment comparisons whenever equal or growing periodic payments are involved.