How to use the Annuity Calculator
- Enter the amount deposited every month.
- Enter the annual rate credited.
- Enter the number of years deposits continue.
- Set timing to 1 for end-of-period deposits or 0 for beginning-of-period.
How the calculation works
An ordinary annuity assumes deposits land at the end of each period; an annuity due assumes the start. Since every annuity-due deposit earns one extra period of interest, its value is simply the ordinary result multiplied by (1 + r) — small per period, meaningful over decades.
The formula treats the rate as constant, which is appropriate for fixed annuities and savings products but not for variable annuities tied to market performance. For those, treat the rate as an expected value and test a range.
Fixed annuity products layer on surrender charges, mortality and expense fees and rider costs that this pure accumulation model excludes. Deduct total product charges from the credited rate before entering it.
FV = PMT × [((1 + r)ⁿ − 1) ÷ r]; annuity due × (1 + r)Source: Society of Actuaries financial mathematics, annuity-immediate and annuity-due valuation.
Worked example
$1,000 a month at 5% for 20 years, end of period.
- Monthly rate 0.4167% over 240 periods.
- The accumulation factor is about 411.03.
Roughly $411,000, of which $240,000 is deposits and $171,000 is credited interest.
Frequently asked questions
What is the difference between an annuity and this calculation?+
This is the accumulation maths. A commercial annuity contract adds insurance guarantees and fees on top.
Are annuity gains taxed?+
In the US, growth inside a deferred annuity is tax-deferred and taxed as ordinary income on withdrawal.
How do surrender charges work?+
They decline over a schedule, often 7% in year one to zero by year seven, and apply to withdrawals above the free amount.
Last reviewed September 1, 2026. We review this page whenever the underlying formula, tax year, published rate or standard changes.