The Annuity Calculator covers accumulation, payout, and deferred payout modes using ordinary annuity formulas so future value or payment size follows from rate, frequency, and term. Enter the mode’s inputs, and the Annuity Calculator returns the value or installment exact to the cent.
An annuity here means equal payments at regular intervals. Accumulation asks how large a stream of deposits becomes; payout asks how large a payment a lump sum can support; deferred payout grows a lump sum first, then converts it to payments. The Annuity Calculator separates those questions so the inputs match the intent.
*These results are estimates for information only, not insurance, investment, or retirement advice.*
Calculate an annuity value with the Annuity Calculator
The Annuity Calculator calculates an annuity value as either the future value of deposits or the present value of a payment stream, depending on mode. Ordinary annuities place payments at the end of each period in this model.
Future value of an ordinary annuity: FV = PMT × ((1 + i)^n − 1) / i, where i is the rate per period and n is the number of payments.
Present value: PV = PMT × (1 − (1 + i)^(−n)) / i. Ten annual payments of $100 at 5% have a present value of about $772.17. Five hundred dollars monthly at 5% for 30 years has a future value of about $416,129. The Annuity Calculator applies the matching formula for the mode selected.
One page, two directions of the same relationship: grow payments forward, or discount payments back.
Grow an annuity in the accumulation phase
Accumulation mode grows regular deposits to a future value. The Annuity Calculator compounds each payment to the end of the term and sums those grown amounts via the annuity FV formula. Enter payment, annual rate, years, and payments per year.
Monthly deposits use a monthly rate of annual rate ÷ 12. Raising the payment, the rate, the term, or the deposit frequency raises future value. The $500-per-month, 5%, 30-year case reaching about $416,129 shows how steady deposits plus compounding build a large balance from modest installments. The Annuity Calculator reports that ending value for planning, not as a guaranteed account balance.
Accumulation is the savings phase. Payout is a separate question once a lump sum exists.
Draw income in the payout phase with the Annuity Calculator
Payout mode solves for the payment that exhausts a present value over a fixed term at a stated rate. The Annuity Calculator rearranges the present-value annuity formula to find PMT. PMT = PV × i / (1 − (1 + i)^(−n)).
A larger lump sum or a higher rate raises the payment. A longer payout term lowers the payment and increases the number of periods. Deferred mode grows a lump sum for a waiting period, then runs payout on the grown value so income starts later. The Annuity Calculator’s deferred path combines those steps instead of forcing a manual two-stage calculation.
Payout figures assume the rate and term hold and that payments occur as modeled. Insurance product fees, riders, and guarantees are outside this educational formula set unless reflected in the rate you enter.
Use the annuity factor with the Annuity Calculator
An annuity factor is the multiplier that converts a payment into a present value, or a present value into a payment, for a given rate and number of periods. The Annuity Calculator computes the factor exactly rather than rounding to a printed table.
Present-value annuity factor = (1 − (1 + i)^(−n)) / i. At 5% for 10 annual periods, the factor is about 7.7217, so a $100 payment stream is worth about $772.17 today. Multiplying any level payment by the factor gives present value; dividing a lump sum by the factor gives the sustainable payment in payout mode. Old annuity tables listed these factors by rate and n; the Annuity Calculator regenerates them on demand.
Factors make the link between tables and the on-page result explicit. The Annuity Calculator shows that link when the factor is part of the output.
Growing annuities, where payments rise by a fixed percent each period, need a modified formula and are a different problem from level payments. The Annuity Calculator’s core modes assume level PMT. If payments will rise with inflation, either approximate with a higher level payment or use a dedicated growing-annuity path when the product provides one. Mixing a growing story with a level formula overstates what a fixed installment can buy later.
Insurance illustrations often quote income for life, not for a fixed n. Lifetime payouts depend on mortality assumptions and insurer pricing. The Annuity Calculator’s payout mode uses a fixed number of periods. It is the right tool for “pay this lump sum over 20 years,” not for a guaranteed lifetime quote from a carrier.
Payment frequency changes i and n together: monthly uses i = annual rate ÷ 12 and n = years × 12. Switching from annual to monthly deposits in accumulation mode usually raises future value slightly for the same annual rate because money starts compounding sooner inside the year. The Annuity Calculator applies the frequency entered; keep it matched to how deposits or withdrawals actually occur.
Frequently asked questions
What is an ordinary annuity?
An ordinary annuity places payments at the end of each period. The Annuity Calculator uses that convention for accumulation and payout maths. Annuities due pay at the beginning of each period and are a different formula.
What does deferred mode do?
Deferred mode grows a lump sum during the wait, then pays it out as an annuity. The Annuity Calculator reports the later-period payment size after both steps. Use deferral years for growth and payout years for distribution.
How is the future value of an annuity calculated?
The future value of an annuity is calculated as PMT × ((1 + i)^n − 1) / i for an ordinary annuity. The Annuity Calculator applies that formula in accumulation mode. Five hundred dollars monthly at 5% for 30 years reaches about $416,129.
How is an annuity payment calculated from a lump sum?
An annuity payment is calculated from a lump sum as PMT = PV × i / (1 − (1 + i)^(−n)). The Annuity Calculator uses that rearrange in payout mode. Longer terms lower the payment; higher rates raise it.
What is an annuity factor?
An annuity factor is the present-value or future-value multiplier for a level payment stream at a rate and term. The Annuity Calculator computes it exactly from i and n. Tables once listed the same numbers for hand calculation.
Is this the same as buying an insurance annuity?
This is not the same as buying an insurance annuity product. The Annuity Calculator applies standard time-value formulas for education. Insurance contracts add fees, riders, surrender charges, and guarantees that need the insurer’s illustration.
Summary
The Annuity Calculator values level payment streams in accumulation, payout, and deferred payout modes using ordinary annuity formulas. Accumulation grows deposits with FV = PMT × ((1 + i)^n − 1) / i, as in about $416,129 from $500 monthly at 5% for 30 years.
Payout solves for the installment a lump sum can support; deferred mode grows first, then pays out. The annuity factor links those results to classic table lookups, such as a 10-year 5% present-value factor near 7.72. Figures are estimates for learning, not insurance or investment advice.