Annuity Calculator
Find the future value of an annuity and the growth it earns — enter your principal, annual rate, term and payout frequency to see compounding in action, privately in your browser.
What is an annuity calculator?
An annuity calculator works out the future value of an annuity — how much a lump sum will grow to — and the growth you earn over time. An annuity is money invested today that grows at a stated rate and is later paid out in instalments. Because the value compounds on a fixed schedule, an annuity is a predictable way to grow money toward a goal such as retirement. This free calculator takes four inputs: principal, annual rate, term in years and payout frequency, then returns the future value plus the growth earned. For example, a higher rate or a longer term both raise the future value of the same principal.
The payout frequency tells the calculator how often the annuity value is credited — monthly, quarterly, semiannually or annually. Monthly payouts compound most often and yield the highest future value. The display uses $ for the example, but the math is currency-agnostic and runs entirely in your browser.
How to use
- Enter the principal amount you are investing today.
- Set the annual interest rate on the annuity.
- Enter the term in years and choose the payout frequency.
- Click Calculate annuity to see the future value and total growth.
How future value is calculated
FV = P × (1 + r/n)^(n×t) n = number of payout periods per year
The investment compounds on both the principal and previously earned interest, so the future value grows faster than simple growth. Monthly payouts (n = 12) compound more often than annual payouts (n = 1), which is why the same rate and term can yield different results.
Example
With the defaults — $10,000 as principal, 6% annual rate, 10 years and monthly payout frequency — click Calculate annuity. The future value is $18,193.97 and the total growth is $8,193.97. Now switch the payout frequency from monthly to annual and watch the future value fall, because the same rate compounds only once a year.
Common use cases
- Plan retirement income: see how a lump sum grows before payouts begin.
- Compare annuity products: test how different rates and payout frequencies change the future value.
- Goal-based saving: estimate how much a single amount grows toward a future target.
- Understand compounding: see why monthly payouts beat annual ones at the same nominal rate.
Pro tips
- More frequent payouts earn more: monthly compounds 12 times a year, so it yields more than annual for the same rate.
- Time is the biggest lever: a longer term lets compounding do far more work than a higher rate alone.
- Use the Rule of 72: divide 72 by the rate to estimate years to double — at 6%, that is about 12 years.
- Compare retirement annuities: check the same principal and term with monthly versus semiannual payouts.
FAQ
What is an annuity?
An annuity is a financial product or stream where you invest money that grows over time and is later paid out. This calculator models the investment and growth side by compounding.
How is the future value of an annuity calculated?
Use FV = P × (1 + r/n)^(n × t), where P is the principal, r the annual rate, n the number of payout (compounding) periods per year and t the time in years.
What does payout frequency mean?
Payout frequency is how often the annuity's value is credited or paid — monthly, quarterly, semiannually or annually. It maps to the compounding frequency in the formula.
Does payout frequency change the result?
Yes. More frequent payouts, such as monthly, compound more often and produce a slightly higher future value for the same principal, rate and term.
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 beginning. Payments at the start earn more total growth over time.
Is the growth earned by an annuity taxable?
Typically yes. The growth is often taxed as income when it is withdrawn, so factor in your tax situation when estimating your real, after-tax return.
Is this annuity calculator free and private?
Yes. It runs entirely in your browser and nothing is uploaded anywhere.
How does growth relate to the principal?
Growth is the future value minus the principal you start with. Higher rates, longer terms and more frequent payouts all increase growth.
What is the rule of 72 for annuities?
The Rule of 72 estimates how long it takes to double: divide 72 by the annual rate. At 6%, money doubles in about 12 years.
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