# Present Value of Annuity Calculator

URL: https://speedycalculator.com/calculators/finance/annuity-present-value/
Last updated: 2026-10-25

> The present value of annuity calculator works out what a stream of future regular payments is worth today – with any frequency, compounding, ordinary or due timing and payment growth – useful for pensions, structured settlements and lottery annuities.

## Inputs

- Payment per period
- Annual interest rate (%)
- Number of years (years, months)
- Payment frequency
- Compounding frequency
- Payments made at
- Growth of payments per year (%)

## Results

- Number of payments
- Present value
- Total payments
- Discount (time value of money)

## Formula

```
PV = P × (1 − (1 + i)^−n) ÷ i × (1 + i × timing)
Growing: PV = P × (1 − ((1 + g) ÷ (1 + i))^n) ÷ (i − g) × (1 + i × timing)
```

## Explanation

Money paid later is worth less than money today. The present value lets you compare a stream of payments with a lump sum offer – if the lump sum is higher than the PV at your discount rate, take it.

### How to use the Present Value of Annuity Calculator

- **Payment per period**
- **Annual interest rate**
- **Number of years**
- **Payment frequency**
- **Compounding frequency**
- **Payments made at**
- **Growth of payments per year**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the payment, discount rate, number of years, payment frequency, compounding, timing and growth.

### Tips

- Start early – time does more of the work than the amount you save.
- Take the full employer match if your plan offers one.
- Plan with a cautious return (4–6% after inflation) and check again every year.
- Know the contribution limits and required minimum distribution rules for your accounts.

### Common mistakes to avoid

- Ignoring inflation when setting a retirement target.
- Underestimating how long retirement can last.
- Withdrawing early and paying penalties and taxes.

### Inputs explained

FieldWhat to enterPayment per periodAmount in your currencyAnnual interest rateIn %Number of yearsUnits: years, monthsPayment frequencyChoose one: Monthly, Semi-monthly, Bi-weekly, Weekly …Compounding frequencyChoose one: Yearly, Semi-annually, Quarterly, Monthly …Payments made atChoose one: End of each period, Beginning of each periodGrowth of payments per yearIn %

### What each result means

- **Number of payments** = round([Number of years]×[Payment frequency])
- **Present value** = gpv([Rate per payment period], [Number of payments], [Payment per period], [Payment growth per period], [Payments made at])
- **Discount (time value of money)** = [Total payments] - [Present value]

### Example values

How the main result changes when **Payment per period** changes and everything else stays at the example values above:

Payment per periodPresent value50075,762.66750113,643.981,000151,525.311,250189,406.641,500227,287.972,000303,050.63

## Worked example

Inputs — Payment per period: $1,000; Annual interest rate: 5 %; Number of years: 20 years; Payment frequency: Monthly; Compounding frequency: Monthly; Payments made at: End of each period; Growth of payments per year: 0 %.

Results — Number of payments = 240; **Present value = $151,525.31**; Total payments = $240,000.00; Discount (time value of money) = $88,474.69.

## FAQ

**What is the present value of an annuity?**
Today's value of a series of future payments.

**Which discount rate should I use?**
Your expected investment return or the rate on similar-risk assets.

**Is a lump sum better than an annuity?**
If the lump sum exceeds the annuity's present value at your rate.

**What formula does the Present Value of Annuity Calculator use?**
PV = P × (1 − (1 + i)^−n) ÷ i × (1 + i × timing).


## Sources

- [U.S. SEC – Investor.gov compound interest and investing basics](https://www.investor.gov/)