FINEDGE LEARNING

Interactive Concept: Present Value of an Annuity

Explore how future value, equal periodic payments, timing, the annual interest rate, and the number of years shape the present value of an annuity. The blue curve stays the same style across modes, while the payment markers switch color based on ordinary annuity or annuity due.

Prototype
Present Value
$4,310.13
Scenario
Ordinary annuity at 10.0% for 20 years
Blue line = value path for the selected mode Colored dots = payment markers for the selected mode
Dollars
Years
Value path Payment markers, Ordinary annuity (end mode)

Timing Comparison

Compare the present value under ordinary annuity versus annuity due using the same inputs.

Present Value Table

The table separates the future value lump sum and each annuity payment so the time cost and present value are easy to see. The total present value equals the sum of all discounted cash flows.

Rows are ordered from the future value input back to the nearest payment so students can see how each cash flow is discounted to present value.