Annuity Payment Calculator
Calculate the periodic annuity payment based on the rate, term and starting amount.
Tip: Private pension funds in Albania (such as the Raiffeisen Voluntary Pension Fund) use the annuity formula to calculate the monthly pension payment — check the real rate after fees.
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About this digital tool
The annuity payment calculator finds the periodic payment, monthly or yearly, when you know the starting capital, the interest rate and the term. The formula for an ordinary annuity is PMT = P × r ÷ (1 − (1 + r)^−n), where P is the capital, r the rate per period and n the number of periods. You can choose whether payments are made at the end or at the start of the period.
It is useful for equal-instalment loans, for planning withdrawals from a pension pot or for understanding how much a private fund pays you each month. The result assumes a constant rate, so it is an estimate: real rates, fees and taxes may change the payment. For insurance or pension products, read the provider's terms.
How to use
- Enter the starting amount (present value)
- Enter the annual interest rate
- Enter the term (number of periods)
- Choose the type: ordinary or due
- See the periodic payment and the total interest
Frequently asked questions
What is an annuity?
An annuity is a series of equal payments made at regular intervals (e.g. every month) for a set period. It is used in loans, life insurance and pension funds.
What is the difference between an ordinary annuity and an annuity due?
In an ordinary annuity, the payment is made at the end of the period. In an annuity due, the payment is made at the start. An annuity due has a slightly higher value because the money is invested one period earlier.
How is the annuity payment calculated?
The formula is: PMT = PV × [r(1+r)ⁿ] / [(1+r)ⁿ - 1], where PV = present value, r = periodic rate, n = number of periods.
When is the annuity payment used?
For equal-instalment loans, for spreading a capital sum into periodic payments and for any plan with regular cash flows.