 Home Page Index All Pages

Quick Search
» Create a new Page Administration File Management Login/Logout Your Profile

Other Wiki Sections Software Annuity Calculations

Modified on Sat, Mar 23, 2013, 5:47 PM Categorized as Algorithms, General Information, Microsoft Office

Overview¶

This article explains various means of calculating the payment amount of an annuity given the present value and interest rate.

IMPORTANT NOTE REGARDING INTEREST RATES AND APR

1. In the following formulas, the interest rate is the PERIODIC rate. Thus, if N is in months, then the interest rate should be PER MONTH.

2. Banks typically calculate APR as COMPOUNDED YEARLY. Thus if N is in months, then the interest rate you use should be APR/12.

Solutions¶

In Excel¶ Annuity Calculation in Excel

In Visual Basic¶

Function AnnuityToPvRatio(i As Double, N As Integer) As Double

Dim fp As Double
fp = FutureToPvRatio(i, N)

AnnuityToPvRatio = (i * fp) / (fp - 1)

End Function
Function FutureToPvRatio(i As Double, N As Integer) As Double

FutureToPvRatio = (1 + i) ^ N

End Function

Manual Calculation¶

i (1+i)^N
A/P = ---------------
(1+i)^N - 1

i (F/P)
= -------------
(F/P) - 1
Name Size AnnuityExcel.png 7.10 KB

ScrewTurn Wiki version 3.0.1.400. Some of the icons created by FamFamFam. Except where noted, all contents Copyright © 1999-2019, Patrick Jasinski.