Annuity Calculator

Free Online Annuity Calculator

This annuity calculator works out the future value of a fixed annuity built from regular contributions, so you can see what a savings habit turns into after years of steady growth. Just enter your starting deposit, how much you plan to add on a regular basis, your expected interest rate, and how long you plan to keep contributing. The calculator does the rest, showing you a final future value, a year-by-year growth chart, and a full breakdown of how much of that final number came from your own money versus interest.

Unlike a plain compound interest tool, this calculator is built specifically around annuities — a stream of equal payments made at regular intervals. That covers a wide range of real situations: a fixed annuity contract from an insurance company, a recurring deposit into a retirement account, a systematic investment plan, or simply a habit of putting a set amount into savings every month. On top of the basic future value math, this tool also supports annuity due timing, contributions that grow every year, and an inflation-adjusted view of your results — features most basic calculators leave out.

What Is an Annuity?

An annuity is simply a series of equal payments made at fixed intervals — monthly, quarterly, or annually — that continue for a set period of time. The term shows up in two very different places. Financial and insurance companies sell annuity contracts as a retirement product, where you either pay in regularly and receive a lump sum or income stream later, or pay a lump sum now for guaranteed payments down the road. But the same math also describes any recurring contribution plan: a retirement account with automatic monthly deposits, a recurring transfer into a savings account, or a fixed monthly investment into a mutual fund.

This calculator focuses on the accumulation side — the future value of an annuity — which answers the question: if I keep contributing the same amount on a regular schedule, and my money earns a fixed rate of return, how much will I have at the end?

Future Value of Annuity Formula

For an ordinary annuity, where each payment lands at the end of the period, the future value formula is:

FV = PMT × [((1 + r)^n − 1) / r]

For an annuity due, where each payment lands at the start of the period, every payment earns one extra period of interest, so the formula becomes:

FV = PMT × [((1 + r)^n − 1) / r] × (1 + r)

• FV = future value of the annuity
• PMT = the fixed payment made each period
• r = interest rate per period (annual rate divided by the number of periods per year)
• n = total number of payment periods (years × payments per year)

How to Calculate Future Value of an Annuity — Step by Step

Here is the logic this calculator follows behind the scenes:

• Step 1: Convert the annual interest rate into a rate per period by dividing it by the number of contributions per year.
• Step 2: Work out the total number of periods by multiplying the number of years by the contributions per year.
• Step 3: Add each new contribution to the running balance, then apply interest for that period.
• Step 4: For an annuity due, apply the interest one period earlier, since the payment arrives at the start rather than the end of the period.
• Step 5: Repeat this for every period until the full term is complete, then add the future value of any initial lump-sum deposit on top.
• Step 6: Subtract total contributions from the final balance to isolate how much came from interest alone.

Worked Example — Calculating an Annuity's Future Value

Say you start with a $5,000 deposit and add $300 every month for 15 years, at a fixed 6% annual interest rate, using an ordinary annuity (payments at the end of each month).

• Monthly rate: 6% ÷ 12 = 0.5% per month.
• Total periods: 15 years × 12 = 180 months.
• Total contributed: $5,000 initial deposit + ($300 × 180) = $59,000.
• Applying the formula across all 180 months, the account grows to roughly $91,000 to $92,000, depending on rounding.
• So the interest earned over 15 years is around $32,000 to $33,000 — more than half of the money in the account by the end came purely from compounding, not from your own contributions.

Ordinary Annuity vs. Annuity Due

The timing of each payment matters more than people expect. In an ordinary annuity, the payment happens at the end of each period, which is how most loan repayments, bond coupons, and many savings plans work. In an annuity due, the payment happens at the start of each period instead, which is common with rent payments, insurance premiums, and some retirement contribution plans where money is deposited right at the beginning of the pay cycle.

Because an annuity due payment sits in the account for one extra period, it earns one extra period of interest compared to the same payment made under an ordinary annuity. Over a long time horizon, this small timing difference can add up to a noticeably larger final balance, even though the payment amount, rate, and number of periods are all identical. Switching the toggle on this calculator between the two modes lets you see exactly how much that timing shift is worth for your own numbers.

How Contribution Frequency Affects Growth

Contributing more often — say, monthly instead of annually — generally results in a slightly higher future value for the same total amount contributed per year, because smaller amounts start earning interest sooner rather than waiting for one large annual deposit. The difference is usually modest compared to changing the interest rate or the total contribution size, but it is not zero, and it becomes more noticeable the higher the interest rate and the longer the time horizon. This calculator lets you switch between monthly, quarterly, semi-annual, and annual contributions to compare the exact effect on your own plan.

The Role of Compounding in Annuity Growth

Every contribution you make doesn't just sit still — it starts earning its own interest, and that interest earns further interest in later periods. This is exactly the same compounding effect that drives regular savings accounts and investments, except an annuity applies it across a whole stream of equal payments rather than a single lump sum. Early contributions end up doing more work than later ones simply because they have more time in the account to compound, which is one reason financial planners often stress starting a savings habit as early as possible, even with smaller amounts.

Growing Contributions — An Advanced Feature

Real-world savings habits rarely stay perfectly flat for decades — most people increase how much they set aside as their income rises. This calculator includes an optional annual contribution increase, so you can model a plan where your payment grows by a fixed percentage every year, similar to how a retirement contribution might rise alongside a yearly raise. Turning this on shows a more realistic future value for anyone who expects their contribution amount to grow over time rather than stay fixed at today's number.

Adjusting for Inflation — Understanding Real Value

A future value in nominal dollars can be misleading over long time periods, because prices rise too, and money in twenty years won't buy as much as the same amount today. This calculator includes an optional expected inflation rate that converts your final future value into an inflation-adjusted figure — an estimate of what that money would be worth in today's purchasing power. This is especially useful for long-term retirement planning, where a headline number that looks impressive on paper can be worth noticeably less once inflation over several decades is taken into account.

Where Fixed Annuities Are Used

Fixed annuities show up in several common financial situations. Insurance companies sell fixed annuity contracts as a retirement product, guaranteeing a set interest rate over the accumulation period. Many retirement accounts function the same way in practice, with automatic contributions added on a fixed schedule and a set (or reasonably predictable) rate of return. Systematic investment plans, recurring deposit accounts, and structured settlement payouts all follow the same underlying annuity math as well, which is why understanding the future value formula is useful well beyond just insurance products.

Common Mistakes When Calculating Annuities

One of the most common mistakes is mixing up ordinary annuities and annuity due, which leads to a final value that's slightly off — usually understated, since ordinary annuity math is often used as the default even when payments actually happen at the start of the period. Another frequent error is entering the annual interest rate directly into a per-period calculation without dividing it by the number of contribution periods first, which significantly overstates growth. It's also easy to overlook the effect of inflation on long-term plans, treating a future dollar as equal in value to a dollar today when it typically is not. Running your numbers through a dedicated calculator like this one avoids all three of these mistakes automatically.

Why Use This Annuity Calculator?

This tool models real annuity growth with support for an initial deposit, custom contribution frequency, ordinary or due timing, optional yearly contribution increases, and an inflation-adjusted real value — all in one place. You get an instant future value, a full year-by-year chart and table, and a downloadable CSV breakdown, so whether you're comparing a fixed annuity contract, planning retirement contributions, or just curious what a monthly savings habit adds up to, you get an accurate, clear answer in seconds rather than working through the formula by hand.