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Present Value of Annuity Formula

GoPresent Value of Annuity with Continuous Compounding Formula

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Present Value of Annuity is the current value of a set of cash flows in the future, given a specified rate of return or discount rate. Check FAQs

PVAnnuity = (\frac{p}{IR}) \cdot (1 - (\frac{1}{{(1 + IR)}^{n Months}}))

PVAnnuity - Present Value of Annuity?p - Monthly Payment?IR - Interest Rate?n_Months - Number of Months?

Present Value of Annuity Example

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Here is how the Present Value of Annuity equation looks like with Values.

Here is how the Present Value of Annuity equation looks like with Units.

Here is how the Present Value of Annuity equation looks like.

5090.9091 = (\frac{28000}{5.5}) \cdot (1 - (\frac{1}{{(1 + 5.5)}^{13}}))

5090.9091 = (\frac{28000}{5.5}) \cdot (1 - (\frac{1}{{(1 + 5.5)}^{13}}))

5090.9091 = (\frac{28000}{5.5}) \cdot (1 - (\frac{1}{{(1 + 5.5)}^{13}}))

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Present Value of Annuity Solution

Follow our step by step solution on how to calculate Present Value of Annuity?

FIRST Step Consider the formula

PVAnnuity = (\frac{p}{IR}) \cdot (1 - (\frac{1}{{(1 + IR)}^{n Months}}))

Next Step Substitute values of Variables

∴

PVAnnuity = (\frac{28000}{5.5}) \cdot (1 - (\frac{1}{{(1 + 5.5)}^{13}}))

Next Step Prepare to Evaluate

∴

PVAnnuity = (\frac{28000}{5.5}) \cdot (1 - (\frac{1}{{(1 + 5.5)}^{13}}))

Next Step Evaluate

∴

PVAnnuity = 5090.90909077139

LAST Step Rounding Answer

∴

PVAnnuity = 5090.9091

Present Value of Annuity Formula Elements

Variables

Present Value of Annuity

Present Value of Annuity is the current value of a set of cash flows in the future, given a specified rate of return or discount rate.

Symbol: PVAnnuity

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Present Value of Annuity

Monthly Payment

The Monthly Payment is the amount a borrower is required to pay each month until a debt is paid off.

Symbol: p

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Monthly Payment

Interest Rate

Interest Rate is the amount charged, expressed as a percentage of the principal, by a lender to a borrower for the use of assets.

Symbol: IR

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Interest Rate

Number of Months

The Number of Months is the total number of compounding intervals.

Symbol: n_Months

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Number of Months

Other Formulas to find Present Value of Annuity

Go Present Value of Annuity with Continuous Compounding

PVAnnuity = C f \cdot (\frac{1 - e^{- r \cdot n Periods}}{e^{r} - 1})

Other formulas in Present Value category

Go Present Value of Future Sum given compounding periods

PV = \frac{FV}{{(1 + (\frac{%RoR}{C n}))}^{C n \cdot n Periods}}

Go Present Value of Future Sum given Total Number of Periods

PV = \frac{FV}{{(1 + IR)}^{t}}

Go Present Value of Future Sum given Number of Periods

PV = \frac{FV}{\exp (%RoR \cdot n Periods)}

Go Present Value of Lumpsum

PV L = \frac{FV}{{(1 + IR P)}^{n Periods}}

How to Evaluate Present Value of Annuity?

Present Value of Annuity evaluator uses Present Value of Annuity = (Monthly Payment/Interest Rate)*(1-(1/(1+Interest Rate)^Number of Months)) to evaluate the Present Value of Annuity, Present Value of Annuity is the current value of a set of cash flows in the future, given a specified rate of return or discount rate. Present Value of Annuity is denoted by PVAnnuity symbol.

How to evaluate Present Value of Annuity using this online evaluator? To use this online evaluator for Present Value of Annuity, enter Monthly Payment (p), Interest Rate (IR) & Number of Months (n_Months) and hit the calculate button.

FAQs on Present Value of Annuity

What is the formula to find Present Value of Annuity?

The formula of Present Value of Annuity is expressed as Present Value of Annuity = (Monthly Payment/Interest Rate)*(1-(1/(1+Interest Rate)^Number of Months)). Here is an example- 4666.667 = (28000/5.5)*(1-(1/(1+5.5)^13)).

How to calculate Present Value of Annuity?

With Monthly Payment (p), Interest Rate (IR) & Number of Months (n_Months) we can find Present Value of Annuity using the formula - Present Value of Annuity = (Monthly Payment/Interest Rate)*(1-(1/(1+Interest Rate)^Number of Months)).

What are the other ways to Calculate Present Value of Annuity?

Here are the different ways to Calculate Present Value of Annuity-

Present Value of Annuity=Cashflow per Period*((1-e^(-Rate per Period*Number of Periods))/(e^Rate per Period-1))

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Present Value of Annuity Formula

​GoPresent Value of Annuity with Continuous Compounding Formula

Present Value of Annuity Example

Present Value of Annuity Solution

Present Value of Annuity Formula Elements

Other Formulas to find Present Value of Annuity

Other formulas in Present Value category

How to Evaluate Present Value of Annuity?

FAQs on Present Value of Annuity

Variable Name

GoPresent Value of Annuity with Continuous Compounding Formula