Annuity Due Payment Calculator: Plan Your Future Savings with Precision
Enter a goal future value, rate, and number of periods; the calculator returns the annuity-due payment you must deposit at each period’s start. For example, a 6 % rate over 20 years on $250,000 needs about $6,410 per year. Annuities make up roughly 7 % of U.S. household financial assets (Federal Reserve, 2023).
Annuity Due Payment Calculator
Annuity Due Payment:
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How to use the tool
Future Value (FV) – type the amount you want at the end. Example A: $250,000. Example B: $75,000.
Rate Per Period (r) – enter the periodic interest in percent, then divide by 100 in the formula. Samples: 6 % or 4.5 %.
Number of Periods (n) – supply how many equal payments you will make. Samples: 20 or 10.
Press “Calculate” to see the required payment, shown to two decimals.
Formula used
For an annuity due (payments at the period’s start):
Federal Reserve: annuities = 7 % of household financial assets (Federal Reserve, 2023).
FAQ
What is an annuity due?
An annuity due is a series of equal payments made at each period’s start, earning an extra compounding interval (CFA Institute, 2023).
Why does timing matter?
Starting payments sooner adds one full period of growth to every deposit, lowering the required contribution for the same goal (Bodie & Merton, 2021).
Can I use monthly or quarterly inputs?
Yes. Use the matching periodic rate and total periods—for monthly, divide the annual rate by 12 and multiply years by 12 (Investopedia, 2024).
How does inflation affect my target?
Estimate a real rate: subtract expected inflation from the nominal rate; then plug that lower r into the formula (Bureau of Labor Statistics, 2024).
What if my rate changes over time?
This tool assumes a fixed rate. For variable rates, recalculate each time the rate resets or use a spreadsheet with varying r (FINRA, 2023).
Is the payment tax-deductible?
Retirement annuity contributions may qualify for tax deferral, but deductibility depends on plan type and IRS rules (IRS Publication 590, 2023).
How accurate is the calculator?
It uses the exact closed-form annuity-due equation; rounding to cents causes negligible error for typical balances (NIST Handbook 44, 2022).
Expert insight
“Payments at the beginning of each period accumulate one extra interest period, enhancing growth potential” (CFA Level I Curriculum, 2023).
Important Disclaimer
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