Present Value of Ordinary Annuity Calculator: Simplify Financial Planning
Quickly find today’s value of equal yearly payments: type the payment, interest rate, and years, then read the present-value result. The calculator applies the ordinary-annuity formula, identical to what finance textbooks teach. Annuity sales reached a record $310 billion in 2022, showing how widely these products are used (LIMRA Secure Retirement Institute, 2023).
Present Value of an Ordinary Annuity Calculator
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How to use the tool
Enter your periodic payment. Example 1: $1 200. Example 2: $3 000.
Type the annual interest rate (APR). Try 4.2 % or 6.7 %.
Insert the number of years. Use 15 or 8 years to match the samples.
Select “Calculate”. The tool instantly outputs the present value.
Payments occur at period end, defining an ordinary annuity (Investopedia, Ordinary Annuity).
Tool accepts interest rates from 0.01 % to 99.99 % by design validation.
U.S. prime rate averaged 3.25 %–21.5 % since 1947 (Federal Reserve, H.15).
Annuity sales hit $310 billion in 2022 (LIMRA Secure Retirement Institute, 2023).
“PV calculations translate future cash flows into today’s dollars through discounting.” (CFA Institute Level I, 2020)
FAQ
What is an ordinary annuity?
An ordinary annuity pays equal amounts at each period’s end, unlike an annuity due that pays at the beginning (Investopedia, Ordinary Annuity).
How does the calculator work?
It plugs your inputs into the standard PV formula, performs the exponentiation, then displays the rounded dollar result.
Which inputs do I need?
You provide the fixed payment, nominal annual rate, and number of yearly payments—nothing else.
Can I adjust for inflation?
Use a real rate: subtract expected inflation from the nominal rate before entering it (U.S. BLS CPI Handbook).
Is the output exact?
Results are mathematically exact to two decimals; rounding differences are ≤ $0.01.
How to handle monthly payments?
Divide the annual rate by 12 and multiply years by 12 to convert periods (CFA Institute, 2020).
What if the interest rate equals zero?
The PV becomes payment × number of periods because no discounting occurs.
How does present value differ from future value?
Present value discounts to today; future value compounds forward using $(1+r)^n$ (CFA Institute, 2020).
Important Disclaimer
The calculations, results, and content provided by our tools are not guaranteed to be accurate, complete, or reliable. Users are responsible for verifying and interpreting the results. Our content and tools may contain errors, biases, or inconsistencies. We reserve the right to save inputs and outputs from our tools for the purposes of error debugging, bias identification, and performance improvement. External companies providing AI models used in our tools may also save and process data in accordance with their own policies. By using our tools, you consent to this data collection and processing. We reserve the right to limit the usage of our tools based on current usability factors. By using our tools, you acknowledge that you have read, understood, and agreed to this disclaimer. You accept the inherent risks and limitations associated with the use of our tools and services.
