Annuity Payment (PV) Formula and Calculator


Finance Formulas

  • Home
  • General Finance
  • Banking
  • Stocks/Bonds
  • Corporate Finance
  • Financial Markets
  • Alphabetical List
Google
Custom Search

Annuity Payment (PV)

Annuity Payment PV Calculator (Click Here or Scroll Down)

report this ad

Annuity Payment Formula

The annuity payment formula is used to calculate the periodic payment on an annuity. An annuity is a series of periodic payments that are
received at a future date. The present value portion of the formula is the initial payout, with an example being the original payout on
an amortized loan.

The annuity payment formula shown is for ordinary annuities. This formula assumes that the rate does not change, the payments stay
the same, and that the first payment is one period away. An annuity that grows at a proportionate rate would use the growing annuity
payment formula. Otherwise, an annuity that changes the payment and/or rate would need to be adjusted for each change. An annuity that
has its first payment due at the beginning would use the annuity due payment formula and the deferred annuity payment formula would have
a payment due at a later date.

The annuity payment formula can be used for amortized loans, income annuities, structured settlements, lottery payouts(see
annuity due payment formula if first payment starts immediately), and any other type of constant periodic payments.

Per Period

The rate per period and number of periods should reflect how often the payment is made. For example, if the payment is monthly, then the
monthly rate should be used. Likewise, the number of periods should be the number of months. This concept is important to remember with all
financial formulas.

Annuity Payment Formula Explained

The annuity payment formula can be determined by rearranging the PV of annuity formula.

Present Value of Annuity

After rearranging the formula to solve for P, the formula would become:

Solve for Payment

This can be further simplified by multiplying the numerator times the reciprocal of the denominator, which is the formula shown at the top
of the page.

Return to Top

  • Formulas related to Annuity Payment
  • PV of Annuity
  • Loan Payment
  • Equivalent Annual Annuity
  • Annuity Payment Factor
  • Annuity Payment (FV)
  • Annuity Due Payment (PV)

New to Finance?

Start with the Basics

  • Present Value
  • Future Value
  • Compound Interest
  • Simple Interest
report this ad

Annuity Payment Calculator (PV)

  • Alphabetical Index:
  • A-C
  • D-F
  • G-I
  • J-L
  • M-P
  • Q-S
  • T-V
  • W-Z
  • Home
  • Privacy Policy

*The content of this site is not intended to be financial advice.
This site was designed for educational purposes.
The user should use information provided by any tools or material at his
or her own discretion, as no warranty is provided.

When considering this site as a source for academic reasons, please
remember that this site is not
subject to the same rigor as academic journals, course materials,
and similar publications.

Feel Free to Enjoy!

Contact us at:
[email protected]


Quantcast

Finance Formulas

  • Home
  • General Finance
  • Banking
  • Stocks/Bonds
  • Corporate Finance
  • Financial Markets
  • Alphabetical List
Google
Custom Search

Annuity Payment (PV)

Annuity Payment PV Calculator (Click Here or Scroll Down)

report this ad

Annuity Payment Formula

The annuity payment formula is used to calculate the periodic payment on an annuity. An annuity is a series of periodic payments that are
received at a future date. The present value portion of the formula is the initial payout, with an example being the original payout on
an amortized loan.

The annuity payment formula shown is for ordinary annuities. This formula assumes that the rate does not change, the payments stay
the same, and that the first payment is one period away. An annuity that grows at a proportionate rate would use the growing annuity
payment formula. Otherwise, an annuity that changes the payment and/or rate would need to be adjusted for each change. An annuity that
has its first payment due at the beginning would use the annuity due payment formula and the deferred annuity payment formula would have
a payment due at a later date.

The annuity payment formula can be used for amortized loans, income annuities, structured settlements, lottery payouts(see
annuity due payment formula if first payment starts immediately), and any other type of constant periodic payments.

Per Period

The rate per period and number of periods should reflect how often the payment is made. For example, if the payment is monthly, then the
monthly rate should be used. Likewise, the number of periods should be the number of months. This concept is important to remember with all
financial formulas.

Annuity Payment Formula Explained

The annuity payment formula can be determined by rearranging the PV of annuity formula.

Present Value of Annuity

After rearranging the formula to solve for P, the formula would become:

Solve for Payment

This can be further simplified by multiplying the numerator times the reciprocal of the denominator, which is the formula shown at the top
of the page.

Return to Top

  • Formulas related to Annuity Payment
  • PV of Annuity
  • Loan Payment
  • Equivalent Annual Annuity
  • Annuity Payment Factor
  • Annuity Payment (FV)
  • Annuity Due Payment (PV)

New to Finance?

Start with the Basics

  • Present Value
  • Future Value
  • Compound Interest
  • Simple Interest
report this ad

Annuity Payment Calculator (PV)

  • Alphabetical Index:
  • A-C
  • D-F
  • G-I
  • J-L
  • M-P
  • Q-S
  • T-V
  • W-Z
  • Home
  • Privacy Policy

*The content of this site is not intended to be financial advice.
This site was designed for educational purposes.
The user should use information provided by any tools or material at his
or her own discretion, as no warranty is provided.

When considering this site as a source for academic reasons, please
remember that this site is not
subject to the same rigor as academic journals, course materials,
and similar publications.

Feel Free to Enjoy!

Contact us at:
[email protected]

x

x


Quantcast