Present value (P)
—
- P
- present value
- A
- uniform amount per period
- i
- discount rate per period
- n
- number of periods
Worked example · $5,000 per year for 7 years at 5% is worth $28,932 today.
Eq.05 · Uniform series
Present Worth Annuity Calculator
Use this present worth annuity calculator to discount every payment in a uniform series back to a single present value today.
P = A [(1 + i)^n - 1] / [i (1 + i)^n]
How to use this calculator
- 1 Enter the equal payment amount as A (each period's payment)
- 2 Enter the discount rate per period as i and the number of periods as n
- 3 Read P — the present value of the whole payment stream
Examples
$5,000 a year for 7 years
This present worth annuity example matches the calculator's default inputs — a steady payment stream valued as one lump sum today.
Given: A = $5,000 per year, i = 5% per year, n = 7 years
Result: P = $28,932
Lease payment present value
Present worth of an annuity is often used to value a lease — turning a series of yearly payments into one comparable price today.
Given: A = $2,000 per year, i = 4% per year, n = 5 years
Result: P = $8,904
A 5-year loan payment stream
Lenders use the same present worth annuity formula to size a loan: monthly payments discounted back to the amount borrowed.
Given: A = $1,000 per month, i = 0.5% per month, n = 60 months (5 years)
Result: P = $51,726
Frequently asked questions
What is present worth of an annuity?
It is the single present value today of a stream of equal future payments A made each period.
What is the present worth annuity formula?
P = A[(1+i)^n-1] / [i(1+i)^n]
How do I calculate present worth of an annuity?
Enter payment A, discount rate i, and periods n. The calculator returns present value P.
What is an example of present worth of an annuity?
$5,000 per year for 7 years at 5% is worth $28,932 today.
What is the P/A factor?
The P/A factor multiplies uniform payment A to get present value P.