Present value of an annuity due table | Present value table

An annuity is a series of payments that occur over time at the same intervals and in the same amounts. An annuity due arises when each payment is due at the beginning of a period; it is an ordinary annuity when the payment is due at the end of a period. A common example of an annuity due is a rent payment that is scheduled to be paid at the beginning of a rental period.

An example of an annuity is a series of payments from the buyer of an asset to the seller, where the buyer promises to make a series of regular payments. Thus, ABC Clothiers buys a warehouse from Dover Real Estate for $800,000, and promises to pay for the warehouse with eight payments of $100,000, to be paid at intervals of one payment per year; these payments are an annuity.

You might want to calculate the present value of an annuity, to see how much it is worth today. This is done by using an interest rate to discount the amount of the annuity. The interest rate can be based on the current amount you are obtaining through other investments, the corporate cost of capital, or some other measure.

An annuity table represents a method for determining the present value of an annuity. The annuity table contains a factor specific to the number of payments over which you expect to receive a series of equal payments and at a certain discount rate. When you multiply this factor by one of the payments, you arrive at the present value of the stream of payments. Thus, if you expect to receive 5 payments of $10,000 each and use a discount rate of 8%, then the factor would be 4.3121 (as noted in the table below in the intersection of the "8%" column and the "n" row of "5". You would then multiply the 4.3121 factor by $10,000 to arrive at a present value of the annuity of $43,121.

Rate Table For the Present Value of an Annuity Due of 1

n 1% 2% 3% 4% 5% 6% 8% 10% 12%
1 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000
2 1.9901 1.9804 1.9709 1.9615 1.9524 1.9434 1.9259 1.9091 1.8929
3 2.9704 2.9416 2.9135 2.8861 2.8594 2.8334 2.7833 2.7355 2.6901
4 3.9410 3.8839 3.8286 3.7751 3.7232 3.6730 3.5771 3.4869 3.4018
5 4.9020 4.8077 4.7171 4.6299 4.5460 4.4651 4.3121 4.1699 4.0373
6 5.8534 5.7135 5.5797 5.4518 5.3295 5.2124 4.9927 4.7908 4.6048
7 6.7955 6.6014 6.4172 6.2421 6.0757 5.9173 5.6229 5.3553 5.1114
8 7.7282 7.4720 7.2303 7.0021 6.7864 6.5824 6.2064 5.8684 5.5638
9 8.6517 8.3255 8.0197 7.7327 7.4632 7.2098 6.7466 6.3349 5.9676
10 9.5660 9.1622 8.7861 8.4353 8.1078 7.8017 7.2469 6.7590 6.3282
11 10.4713 9.9826 9.5302 9.1109 8.7217 8.3601 7.7101 7.1446 6.6502
12 11.3676 10.7868 10.2526 9.7605 9.3064 8.8869 8.1390 7.4951 6.9377
13 12.2551 11.5753 10.9540 10.3851 9.8633 9.3838 8.5361 7.8137 7.1944
14 13.1337 12.3484 11.6350 10.9856 10.3936 9.8527 8.9038 8.1034 7.4235
15 14.0037 13.1062 12.2961 11.5631 10.8986 10.2950 9.2442 8.3667 7.6282
16 14.8651 13.8493 12.9379 12.1184 11.3797 10.7122 9.5595 8.6061 7.8109
17 15.7179 14.5777 13.5611 12.6523 11.8378 11.1059 9.8514 8.8237 7.9740
18 16.5623 15.2919 14.1661 13.1657 12.2741 11.4773 10.1216 9.0216 8.1196
19 17.3983 15.9920 14.7535 13.6593 12.6896 11.8276 10.3719 9.2014 8.2497
20 18.2260 16.6785 15.3238 14.1339 13.0853 12.1581 10.6036 9.3649 8.3658
21 19.0456 17.3514 15.8775 14.5903 13.4622 12.4699 10.8181 9.5136 8.4694
22 19.8570 18.0112 16.4150 15.0292 13.8212 12.7641 11.0168 9.6487 8.5620
23 20.6604 18.6580 16.9369 15.4511 14.1630 13.0416 11.2007 9.7715 8.6446
24 21.4558 19.2922 17.4436 15.8568 14.4886 13.3034 11.3711 9.8832 8.7184
25 22.2434 19.9139 17.9355 16.2470 14.7986 13.5504 11.5288 9.9847 8.7843
26 23.0232 20.5235 18.4131 16.6221 15.0939 13.7834 11.6748 10.0770 8.8431
27 23.7952 21.1210 18.8768 16.9828 15.3752 14.0032 11.8100 10.1609 8.8957
28 24.5596 21.7069 19.3270 17.3296 15.6430 14.2105 11.9352 10.2372 8.9426
29 25.3164 22.2813 19.7641 17.6631 15.8981 14.4062 12.0511 10.3066 8.9844
30 26.0658 22.8444 20.1885 17.9837 16.1411 14.5907 12.1584 10.3696 9.0218

The preceding annuity table is useful as a quick reference, but only provides values for discrete time periods and interest rates that may not exactly correspond to a real-world scenario. Accordingly, use the annuity formula in an electronic spreadsheet to more precisely calculate the correct amount of the present value of an annuity due.