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Annuity Payment Calculator

Work out the fixed payment for any present-value annuity in seconds.

How it is calculated

An ordinary annuity pays the same amount at the end of every period until a balance is fully repaid. The payment is PMT = PV × r / (1 − (1 + r)−n), where PV is the starting amount (loan or present value), r is the interest rate per period (the percentage entered divided by 100) and n is the number of periods. If the rate is 0, the payment is simply PV / n. The total paid is PMT × n and the interest is the total minus PV. Rate and periods must use the same time unit, such as monthly rate with monthly periods. Fees and taxes are not included.

Worked example

Borrow 10,000 at 1% per period over 12 periods. r = 0.01. (1.01)−12 ≈ 0.8874, so 1 − 0.8874 = 0.1126. PMT = 10,000 × 0.01 / 0.1126 = $888.49. Total paid = 888.49 × 12 = $10,661.85, so the interest is $661.85.

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Common mistakes

  • Entering the annual rate with a monthly period count; divide the annual rate by 12 first, or use periods in years.
  • Entering the rate as a decimal (0.01) instead of a percent number (1).
  • Assuming the payment is due at the start of each period; this formula pays at the end, so a start-of-period annuity differs.
  • Forgetting that fees, insurance and taxes sit outside this payment.

About this calculator

This calculator finds the fixed periodic payment needed to pay off a present value (like a loan) over a set number of periods at a given interest rate, using the standard annuity payment formula PMT = PV × r / (1 − (1+r)⁻ⁿ). It also reports the total amount paid and the total interest over the life of the annuity.

Loan officers, accountants and anyone comparing financing offers use it to see the real monthly or yearly cost of borrowing a fixed sum, while savers use the same formula in reverse to plan structured payouts. Enter the present value, interest rate and number of periods to get the payment.

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