Here's a complete PHP-based Annuity Cost Calculator that calculates the present value of an annuity using the formula: Annuity Cost Calculator - 15201.COM

Annuity Cost Calculator

Calculate the present value of an annuity to determine how much money you need to invest today to receive a series of equal payments in the future.

Input Parameters

Calculation Results

Present Value of Annuity

$0.00

This is the amount you need to invest today to receive $0 per period for 0 periods at an interest rate of 0%.

Calculation Formula

PV = P × [1 - (1 + r)^-n] / r

Where:
PV = Present Value of Annuity
P = Payment Amount per Period
r = Interest Rate per Period
n = Number of Periods

Annuity Cost Calculator Calculator Usage Guide

Learn how to use the Annuity Cost Calculator and understand its working principles

How to Use the Annuity Cost Calculator

  1. Enter the amount of each periodic payment you expect to receive (e.g., monthly payments of $1,000).
  2. Input the annual interest rate (e.g., 4.5% for a 4.5% interest rate).
  3. Specify the total number of payment periods (e.g., 10 for 10 years of annual payments).
  4. Click the "Calculate" button to determine the present value of your annuity.

Understanding the Results

The calculator shows the present value of your annuity - the amount you would need to invest today at the specified interest rate to receive your desired future payments.

Example

Suppose you want to receive $5,000 per year for 15 years, and you can earn 3% interest annually on your investments. The calculator will show that you need to invest approximately $52,821 today to achieve this goal.

Important Notes

  • This calculator assumes payments are made at the end of each period.
  • The interest rate should be entered as a percentage (e.g., 4.5, not 0.045).
  • The calculator is most useful for planning retirement savings, loan payments, or any series of equal future cash flows.