This present value annuity calculator implements the standard present value of annuity formula to determine the value of a series of periodic payments for a given time span. This calculator relies on the mathematical and financial concept of time value of money.
On This Page
- Present Value of Annuity Formula
- Present Value of Annuity Rate Per Period
Present Value Annuity Formula
The formula used to derive the present value of an annuity and the formula used in the present value of annuity calculator is as follows:
p * [ (1 - (1 + r)-n ) / r ]
p = the periodic payment
r = the interest rate per period
n = the number of periods
Present Value of Annuity Rate Per Period
As with all of our financial formulas that involves an interest rate over time, it is important that the rate chosen is of a consistent time span compared to the other variables in the formula. This means if you’re calculating monthly payments but have an annual rate, you’d need to divide your rate by 12 in order for the formula to produce the correct results.