# Present Value (PV) of an Annuity Calculator

### What is a Present Value (PV) of an annuity?

Present value (PV) of an annuity is a financial calculation used when determining the “today” value of an set of annuity payments that occur each compounding period.
As this calculator is structured to parallel the results of a financial calculator, inputs and outputs will be similar – for example, a negative present value (or payment) means an outflow as opposed to a directly negative number.

### How is the Present Value of an Annuity calculated?

The PV of an annuity is calculated through a financial formula used with the time value of money.
$\text{Present Value} = (\frac{\text{Annuity Payment}}{\text{Interest Rate}}) \times (1 - \frac{1}{(1 + \text{Interest Rate})^\text{Number of Periods}})$