Present Value of Annuity Calculator
This calculator estimates the present value of a series of future payments, discounted at a given interest rate. It’s useful for evaluating loans, mortgages, leases, and investment products involving regular payments.
Annuity Present Value Estimator
Present Value of Ordinary Annuity Formula
$$PV = PMT \times \left( \frac{1 – (1 + r)^{-n}}{r} \right)$$
Where:
- $$PV$$ = present value of the annuity
- $$PMT$$ = periodic payment
- $$r$$ = interest rate per period (decimal)
- $$n$$ = total number of periods
The present value of an annuity represents how much a series of future payments is worth today, considering the time value of money. This calculation is commonly used in loan amortizations, retirement planning, and investment analysis. It assumes an ordinary annuity, where payments are made at the end of each period.