Balances  
Final amount  $47,554.91 
Initial balance  $10,000.00 
Total deposit  $12,000.00 
Interest amount  $25,554.91 
Interest on initial bal.  $17,070.41 
Interest on deposit  $8,484.50 
Annuity Calculator
The annuity calculator is a wellfeatured tool that makes it easy to find the final balance  the future value of annuity  of a series of payments made at equal intervals and follow the progress of balances with a dynamic chart and annuity table. You can apply the annuity calculator for a wide range of annuities. For example, you can use it either for regular deposits or withdrawals, for multiple frequencies, or you can compare ordinary annuity vs. annuity due.
In the following, we explain what the annuities definition is and show you some annuity examples to provide better insight into how do annuities work. You can also read about the types of annuity and learn the growing annuity formula.
Still, if you are more interested in finding out how much money you can withdraw throughout a given interval or how long you can withdraw a specific amount of money to deploy the annuity's balance, jump to our annuity payout calculator. Besides, if you would like to know the initial balance you need to reach a certain future value, check our present value of annuity calculator.
What is the annuities definition?  How do annuities work?
Annuities are one of the most fundamental financial structures. To put it simply, any financial product that involves a series of payments made at equal intervals is an annuity. But let's take a closer look at the annuities definition. The series of payments can be either deposits (with positive signs) or withdrawal (with negative signs). Therefore, if you make regular deposits into a savings account, monthly home mortgage, monthly insurance account or pension plan, you happen to face an annuity.
However, in practice and in everyday life annuity meaning takes a more explicit form. So, what does annuity mean? Buying an annuity usually refers to investment plans, for example insurance products, that provide a steady stream of income in retirement. For example, you can buy an annuity that requires a single upfront payment, or a series of payments to the insurance company. Then, the insurance company pays you either one lumpsum or multiple payments if the insurance pays out.
Types of annuity
As you probably already know, annuities have many faces. In general, the types of annuity are classified according to the following features.
 Timing of payments  Ordinary annuity vs. annuity due

Ordinary annuity or annuityimmediate  Payments are made at the end of the periods  mortgages, car loans, and student loans are conventionally ordinary annuities.

Annuity due  Payments are made at the beginning of each period  rental lease payments, life insurance premiums are considered annuity due.
 Contingency of payments  Guaranteed annuities vs. contingent annuities

Annuities certain or guaranteed annuities  It provides payments that will be paid over a period fixed in advance.

Contingent annuities  It pays over the annuitant's remaining lifetime  a typical example is a life annuity.
 Variability of payments

Fixed annuities  It guarantees a fixed return on the initial investment. The Securities and Exchange Commission does not regulate fixed annuities.

Variable annuities  It makes a direct annuity investment into various funds especially created for variable annuities. They are registered products that are regulated by the SEC in the United States of America.

Equityindexed annuities  The annuity payouts are linked to an index. Typically, the minimum payment will be 0%, and the maximum will be predetermined. The credited amount to the customer depends on the performance of the underlying index.
 Deferral of payments  Immediate vs. deferred annuity
 Deferred annuity  The payments begin only after a certain period.
 Immediate annuity  An annuity which begins payments without a deferral period.
Note, that the present annuity calculator can deal exclusively with fixed immediate annuities.
How to use the annuity calculator?  Annuity examples
You need to set the following variables to make the calculator work.
 Initial balance  The present value of the annuity, that is, the balance at the beginning of the annuity.
 Annuity payment  The amount of regular deposit (with a positive sign) or withdrawal (with a negative sign).
 Annuity frequency  The regularity of withdrawal or deposit.
 Type of annuity  You can choose between an annuity due (beginning of period) or an ordinary annuity (end of period).
 Length of annuity  The interval during which the annuity pays.
 Interest rate  The rate of return by which an annuity grows each year.
 Compounding method  The frequency interest is added to the balance.
 Annual growth rate (available in
advanced mode
)  By this option, you can set a specific rate of change (increase or decrease) in your annuity payout.
When you set all the required parameters, you will immediately see the results summarized in a table. You can also follow the progress of your annuity balance in a dynamic chart and annuity table of the payment schedule.
The best way to demonstrate the strengths of the annuity calculator is to take some annuity examples.
 Annuity with fixed deposits
Let's assume you decide to put aside 100 dollars at the end of each month and pay into an annuity where the guaranteed interest rate is 5 percent, compounded monthly. What will be the future value of your annuity after ten years?
Initial balance = $0
Annuity payment = $100
Annuity frequency = Monthly
Type of annuity = Annuity due
Length of annuity = 10 years
Interest rate = 5%
Compounding method = Monthly
After setting the above parameters, you can read that the annuity's future value is $15,528.23.
 Annuity with fixed withdrawal
Let's say you have 10,000 dollars savings and you decide to buy an annuity with a 5 percent interest rate (compounded monthly) where you can withdraw 100 dollars at the beginning of each month. What will be the balance of your annuity after ten years?
Initial balance = $10,000
Annuity payment = $100
Annuity frequency = Monthly
Type of annuity = Annuity due
Length of annuity = 10 years
Interest rate = 5%
Compounding method = Monthly
After setting the above parameters, you will see that the annuity's future value is $877.17.
The growing annuity formula
With the present annuity calculator you can also find out the future value of a growing annuity. In the case of growing annuity, the amount of a series of cash flows, or payments, grows at a proportionate rate. The most straightforward growing annuity formula takes the following form:
FV = P * ((1 + r)ⁿ  (1 + g)ⁿ) / (r  g))
,
Where:
FV
 Future value of the growing annuity;P
 The amount of the series of deposits (positive sign) or withdrawals (negative sign) made at equal intervals;r
 Interest rate;g
 Growth rate; andn
 Number of periods.
Disclaimer
You should consider the annuity calculator as a model for financial approximation. All payment figures, balances, and interest figures are estimates based on the data you provided in the specifications that are, despite our best effort, not exhaustive.
For this reason, we created the calculator for instructional purposes only. Still, if you experience a relevant drawback or encounter any inaccuracy, we are always pleased to receive useful feedback and advice.