Present Value of an Annuity: Formulas, Calculations & Examples

The present value of an annuity is the amount of money needed today to cover future annuity payments. Money received now is worth more due to the time value of money. The present value calculation considers the annuity’s discount rate, affecting its current worth.

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Present Value of an Annuity Formula

Terry Turner Senior Financial Writer and Financial Wellness Facilitator Terry Turner is a senior financial writer for Annuity.org. He holds a financial wellness facilitator certificate from the Foundation for Financial Wellness and the National Wellness Institute, and he is an active member of the Association for Financial Counseling & Planning Education (AFCPE®). Read More

Savannah Pittle Senior Financial Editor Savannah Pittle is an accomplished writer, editor and content marketer. She joined Annuity.org as a financial editor in 2021 and uses her passion for educating readers on complex topics to guide visitors toward the path of financial literacy. Read More

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How to Cite Annuity.org's Article

APA Annuity.org (2024, July 30). Present Value of an Annuity: Formulas, Calculations & Examples. Retrieved September 9, 2024, from https://www.annuity.org/selling-payments/present-value/

MLA "Present Value of an Annuity: Formulas, Calculations & Examples." Annuity.org, 30 Jul 2024, https://www.annuity.org/selling-payments/present-value/.

Chicago Annuity.org. "Present Value of an Annuity: Formulas, Calculations & Examples." Last modified July 30, 2024. https://www.annuity.org/selling-payments/present-value/.

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