How it works
PV = payment × [1 − (1+r)^−n] / r; at zero rate use payment × n. Multiply by (1+r) for payments at the start of each period.
Input definitions
- Payment per period
- Enter the value in the labeled unit.
- Discount rate per period (%)
- Enter the value in the labeled unit.
- Number of periods
- Enter the value in the labeled unit.
- Payment timing
- Choose End of period / Start of period.
A worked example
- Payment per period
- 100
- Discount rate per period (%)
- 10
- Number of periods
- 2
- Payment timing
- End of period
Assumptions & limits
Fixed nonnegative payments and discount rate, equal periods, up to 1,200 periods. No inflation or tax adjustment.
Sources & review
Maintained by AnsRio. Methods and examples use automated checks; this does not imply independent professional certification.
Method updated 2026-10-17. Content checked against the stated method and examples. Our verification approach.
Common questions
What is the difference between an ordinary annuity and an annuity due?
An ordinary annuity pays at the end of each period. An annuity due pays at the start, so every payment is discounted for one fewer period; its present value is multiplied by 1+r.
Are these investment and borrowing results guaranteed?
No. These are deterministic estimates from the inputs and stated method, not predicted returns or lending offers. Actual fees, tax, timing and contractual terms may differ.
How does the Present value of an annuity tool work?
PV = payment × [1 − (1+r)^−n] / r; at zero rate use payment × n. Multiply by (1+r) for payments at the start of each period.
What are the assumptions and limits of Present value of an annuity?
Fixed nonnegative payments and discount rate, equal periods, up to 1,200 periods. No inflation or tax adjustment.