Annuity Plan Calculator – Understand Your Future Payouts

Planning for retirement or long-term financial security often involves choosing the right annuity plan. An annuity allows you to invest a lump sum today and receive regular payments over time—either for a fixed number of years or for life.

1) Periodic Payment (P)

Ordinary annuity (payments at end of period):

$P=\frac{PV\cdot r}{1-(1+r{)}^{-n}}$

Annuity due (payments at beginning of period):

$P_{\text{due}}=\frac{PV\cdot r}{1-(1+r{)}^{-n}}\cdot (1+r)$

2) Total Payments Received

$\text{Total Payments}=P\cdot n$

3) Total Interest Earned

$\text{Total Interest}=\text{Total Payments}-PV$

4) Future Value of Annuity (Accumulated Value of the Payment Stream)

Ordinary annuity:

$FV=P\cdot \frac{(1+r{)}^n-1}{r}$

Annuity due:

$F{V}_{\text{due}}=P\cdot \frac{(1+r{)}^n-1}{r}\cdot (1+r)$

Example (Yearly, Ordinary Annuity)

Inputs

• Investment Amount PV = $100,000
• Annual Interest Rate i = 5%
• Number of Years Y = 20
• Payment Frequency: Yearly $(m=1)\Rightarrow r=\frac{i}{m}=0.05,\text{}n=Y\cdot m=20$
• Annuity Type: Immediate (treated here as ordinary end-of-year payments)
• Payout Option: Fixed Period

Step 1 — Periodic Payment P:

$P=\frac{100,000\cdot 0.05}{1-(1.05{)}^{-20}}\approx 8,024.26$

Step 2 — Total Payments:

$\text{Total Payments}=8,024.26\times 20\approx 160,485.17$

Step 3 — Total Interest:

$\text{Total Interest}=160,485.17-100,000\approx 60,485.17$

Step 4 — Future Value of the Payment Stream (Ordinary):

$FV=8,024.26\cdot \frac{(1.05{)}^{20}-1}{0.05}\approx 265,329.77$

f you model payments at the beginning of each period, multiply P and FV by (1+r) accordingly.)