## Present Value Of Annuity

The present value of annuity formula determines the value of a series of future periodic payments at a given time. The present value of annuity formula relies on the concept of time value of money, in that one amount present day is worth more than that same amount at a future date.

As with any financial formula that involves a rate, it is important to make sure that the rate is consistent with the other variables in the formula. If the payment is per month, then the rate needs to be per month, and similarly, the rate would need to be the annual rate if the payment is annual.

## $$p\left[\frac{1-(1+r{)}^{\mathrm{-n}}}{r}\right]$$

Here,p=periodic payment,r=rate per period,n=number of periods

ENTER THE VARIABLES TO BE USED IN THE FORMULA