Present Value of Annuity Calculator
Understanding Present Value of Annuities
What is Present Value?
The present value of an annuity represents how much money would be needed today to fund a series of future payments. It takes into account the time value of money, recognizing that money available now is worth more than the same amount in the future due to its earning potential.
Types of Annuities
Ordinary Annuity: Payments are made at the end of each period.
Annuity Due: Payments are made at the beginning of each period.
Common Uses
• Retirement planning and pension calculations
• Investment analysis and decision making
• Loan and mortgage evaluations
• Insurance premium calculations