How To Calculate Annuity Payments 8 Steps With Pictures

You should also receive statements on your annuity, which should list your principal balance.

Your statement should also list your interest rate.

The PVOA factor for the above scenario is 15. 62208. Thus, 500,000 = Annual Payment x 15. 62208. Solving the equation for the annual payment gives us $32,005. 98. You can also calculate your payment amount in Excel using the “PMT” function. The syntax is “=PMT(Interest rate,Number of periods,PresentValue,FutureValue). " For the above example, type “=PMT(0. 04,25,500000,0)” in a cell and press “Enter. " There should be no spaces used in the function. Excel returns the value of $32,005. 98.

Find the future value in Excel by using the FV function. The syntax is “=FV(InterestRate,NumberOfPeriods,AdditionalPayments,PresentValue). " Enter “0” for the additional payments variable. Substitute this future value as your annuity balance, and recalculate the payment using the formula “Annuity Value = Payment Amount x PVOA factor”. Given these variables, your annual payment would be $47,559. 29.