Present Value of Annuity Calculator
A dollar arriving in ten years is worth less than a dollar today. This calculator discounts a series of equal future payments back to a single value in today’s dollars — the core math behind annuity pricing, pension valuations, and structured settlement offers.
Illustrative only, based on the assumptions you enter — not a quote, an offer, or financial advice. Rates and rules change; verify current figures with a licensed professional before acting.
How this calculator works
The calculator applies the standard present-value-of-annuity formula: PV = PMT × (1 − (1 + i)⁻ⁿ) ÷ i, where i is the rate per period and n is the number of payments. Choosing "annuity due" multiplies the result by (1 + i) because each payment arrives one period earlier.
The discount rate is the whole game. A low rate says future payments are nearly as good as cash today; a high rate marks them down hard. That is exactly why structured settlement buyers using double-digit discount rates offer far less than the sum of your payments.
Frequently asked questions
What discount rate should I use?
It depends on the question. To compare against a safe investment, use a current high-quality bond yield. To understand a factoring offer, use the discount rate disclosed in the paperwork — required under state Structured Settlement Protection Acts.
What is the difference between an ordinary annuity and an annuity due?
Ordinary annuity payments arrive at the end of each period; annuity due payments arrive at the beginning. Rent is typically an annuity due; most loan and annuity payments are ordinary.
Is this how insurers price annuities?
It is the foundation. Insurers add mortality assumptions for life-contingent payouts, plus expenses and margin, but the discounting math is the same.
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This tool is for general education only and is not financial, tax, or legal advice. Results are illustrations based on your inputs — not quotes or guarantees. Consult a licensed professional before making decisions about annuities, settlements, or retirement accounts.