Turn a lump sum into a stream of payments and see the income, total paid out and interest earned.
What this calculator does
An annuity converts a pot of money into a predictable income for a fixed period. The payment depends on the principal, the interest rate credited, how long payments run, and whether there is a deferral period first.
A longer payout period means smaller payments; a deferral period lets the principal grow first, raising every payment that follows.
Getting your answer
- Enter the principal and the interest rate.
- Set how many years payments should run and how often.
- Add a deferral period if payments start later.
How the number is calculated
payment = P × r ÷ (1 − (1+r)⁻ⁿ)
where r is the periodic rate and n the number of payments
Worked example
On the values this calculator opens with, the payment amount is $1,649.89. Underneath, Value when payouts begin comes out at $250,000 and Total paid out at $395,973.44. Change any field and every figure updates as you type.
Common questions
What is an immediate annuity?
One where payments begin right away — set the deferral period to zero.
Do annuity payments keep pace with inflation?
Only if the contract includes an inflation rider, which lowers the starting payment. A fixed annuity loses purchasing power over time.
Are annuity payments taxable?
Partly. The return-of-principal portion is not taxed; the interest portion is. Rules vary by contract type — this is not tax advice.