How is future value related to present value?

FV is PV compounded forward over the whole term. Both describe the same cash flows, valued at different points in time.

Annuity Calculator

Present and future value, ordinary and due.

Written and maintained by Mohit PatelLast checked August 4, 2026How we build these

Currency

Payment per period

Rate per period

Number of periods

Present value

$7,721.73

Future value $12,577.89

Present value$7,721.73

Future value$12,577.89

Total payments$10,000.00

Interest portion$2,577.89

Present value if paid in advance$8,107.82

An ordinary annuity pays at the end of each period; an annuity due pays at the start, which is worth exactly one extra period of interest — $386.09 more here. Rent and insurance are typically due; loan repayments and coupons are typically ordinary. Getting the convention wrong is a small but systematic error that always favours one side.

How the Annuity Calculator works

An ordinary annuity pays at the end of each period; an annuity due pays at the start, which is worth exactly one extra period of interest. Rent and insurance are typically due; loan repayments and coupons are typically ordinary, and mixing them up is a small but systematic error.

Also known as: present value of an annuity · future value of an annuity · annuity formula · annuity due calculator

Where to go next

The Annuity question rarely arrives on its own. These are the ones that usually come with it:

Future Value Calculator — A lump sum plus contributions, in nominal and real terms.
Bond Price Calculator — Present value of the cash flows, and why price moves inversely to yield.
Present Value Calculator — A lump sum, a level stream, or both.
Loan & EMI Calculator — Monthly payment, total interest, and a full amortization schedule.

Sources

Not financial advice. This calculator is for planning and illustration, not financial advice. Real products carry fees, taxes, and terms it does not model. Confirm figures with your lender or a qualified adviser before committing.

Frequently asked questions

What is the present value of an annuity?

What a stream of future payments is worth today. £1,000 a year for ten years at 5% is worth £7,721.73 now — not £10,000, because later payments are discounted more.

What is the difference between an ordinary annuity and an annuity due?

When the payment lands. An annuity due pays at the start of each period, earning one extra period of interest, so it is worth (1 + r) times the ordinary version.

Which type is my situation?

Rent, insurance premiums and leases are usually due — paid in advance. Loan repayments, bond coupons and salaries are usually ordinary — paid in arrears.

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