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Present Value of Annuity Calculator


Individual Payment (A) : $

Discount Rate (i) :
*enter 6% as .06

Number of Periods (n) :




Present Value of Annuity : $

Present Value of Annuity Formula

Present Value of Annuity = A/i * [1 - (1/(1 + i)n)]


1.PV = the value at time zero
2.A = Individual Payment in each period
3.i = the discount rate (or interest rate)
4.n = the number of periods

Present Value of Annuity Example

Greg owns a hotdog stand and he'd like to sell it for $4000. Bob offers him 4 annual payments of $1000 beginning at the end of this first year. What is this proposition, in today's dollars, currently worth if interest is at 6%?

This offer is presently worth: $3465.106.

Note that Bob offers $4000, but do not confuse his offer with what it is presently worth (its present value) given the time value of money.