Immediate Annuity Calculator

Updated: May 28, 2018

Immediate Annuity Calculator is used to estimate the regular payouts for immediate annuities

Immediate Annuity Payment:

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Background Information

What is Annuity?: An annuity is a fixed sum of money that is paid to someone every year, generally for the rest of their life.

What is Immediate Annuity?: Immediate annuities are long-term, tax-adjourned contracts generally purchased from any insurance company. It provides immediate regular payments in exchange for an investment that was done in a lump-sum manner. These payments last for life or a specified period. Start taking your income as soon as possible through it.

Formula

P = [A x i] / [1 - (1 + i) ^-nt]

Where;

P = periodic payment of an immediate annuity
A = amount of money invest in immediate annuity
i = annual interest rate (annual rate of return for the immediate annuity)
t = number of years you expect to live and receive payments
n = frequency of payments every year

Example: If you invest $50,000 at an 8 percent annual rate of interest, intending to receive payments for 10 years, you'll receive a yearly payment of [50,000 x .08] / [1 - (1 + .08) ^ -10] = $7451.47.

Created: May 18, 2018

Online Tool Designed For: Windows, OS X, Android, iOS, Linux