Annuity Calculator
An annuity is a series of equal payments. Use this calculator either to see what payment a lump sum can support, or to find the lump sum needed to fund a payment.
Results
Payment per period
₹38,764.95
- Lump sum
- ₹50,00,000
- Total paid out
- ₹93,03,587
- Interest included in the payments
- ₹43,03,587
- Number of payments
- 240
A lump sum of ₹50,00,000.00 can pay ₹38,764.95 a month for 20 years at 7%.
Where the payments come from
- Lump sum (principal)₹50,00,000 (53.7%)
- Interest₹43,03,587 (46.3%)
Show the calculation steps
- Rate per period r = 7% ÷ 12 = 0.58333%; number of payments n = 240.
- Payment = lump sum × r ÷ (1 − (1 + r)^−n) = ₹38,764.95.
- Total paid out = ₹38,764.95 × 240 = ₹93,03,587.23, of which ₹43,03,587.23 is interest earned on the balance.
- A fixed-term annuity ends after the term. A lifetime annuity from an insurer depends on your age and their pricing.
Ordinary annuity and annuity due
In an ordinary annuity the first payment comes at the end of the first period. In an annuity due it comes at the start, so each payment earns a period less interest and the lump sum needed is slightly larger.
Fixed-term versus lifetime
This calculator models a payment for a fixed number of years. A lifetime annuity from an insurer is priced using life expectancy, so its payout depends on your age.
Formula
Payment = Lump sum × r ÷ (1 − (1 + r)^−n)
Lump sum = Payment × (1 − (1 + r)^−n) ÷ r
For an annuity due, multiply the lump sum by (1 + r) (or divide the payment by it)
Where:
- r
- = Interest rate per period
- n
- = Number of payments
Example calculation
₹50 lakh paid out monthly over 20 years at 7%
Inputs
- What do you want to find?
- The payment a lump sum can give
- Lump Sum
- ₹50,00,000
- Annual Interest Rate
- 7 %
- Number of Years
- 20 years
- Payments
- Monthly
- Paid
- At the end of each period (ordinary annuity)
Result
- Payment per period
- ₹38,764.95
- Lump sum
- ₹50,00,000
- Total paid out
- ₹93,03,587
- Interest included in the payments
- ₹43,03,587
- Number of payments
- 240
Step-by-step
- Rate per period r = 7% ÷ 12 = 0.58333%; number of payments n = 240.
- Payment = lump sum × r ÷ (1 − (1 + r)^−n) = ₹38,764.95.
- Total paid out = ₹38,764.95 × 240 = ₹93,03,587.23, of which ₹43,03,587.23 is interest earned on the balance.
Important notes
- Payments are level and do not rise with inflation.
Disclaimer: This calculator provides estimates for informational purposes and should not be considered financial advice. Actual figures from lenders, banks and investment products can differ because of fees, taxes, rounding rules and changing rates. Consult a qualified professional before making financial decisions.
Frequently asked questions
How is an annuity payment calculated?
Payment = lump sum × r ÷ (1 − (1 + r)^−n), where r is the rate per period and n the number of payments.
What is the difference between ordinary annuity and annuity due?
Timing: end of the period versus the start.
Does the corpus last forever?
No, the balance reaches zero at the end of the term.
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