What Is an Annuity Table and How Do You Read One?

An annuity table is a financial tool that shows the present value of a series of equal payments made at regular intervals. It is commonly used to estimate how much a stream of payments is worth today or how much a series of deposits will grow over time. By applying interest rate factors to each payment period, an annuity table simplifies calculations that would otherwise require complex formulas, making it a useful reference for evaluating loans, retirement income and investment strategies.

If you have questions about annuities or retirement planning, find a financial advisor to work with using SmartAsset’s free financial advisor matching tool.

What Is Present Value?

To understand how an annuity table works, it’s important to first grasp the concept of present value (PV). Present value is the current worth of a series of future payments, adjusted by an interest rate that reflects the time value of money. In the context of annuities, it shows how much a stream of equal payments over time is worth today. Because money received in the future cannot earn interest until it is in hand, it is always less valuable than the same amount received today.

You can determine the present value of an annuity using the following formula:

PV = PMT x (1 – (1 + r)^-n ÷ r

PV: Present value
PMT: Payment per period
r: Interest rate per period (also called the discount rate)
n: Total number of periods

This calculation lays the foundation for annuity tables, which provide pre-computed present value factors that make evaluating cash flows faster and more efficient.

What Is an Annuity Table?

An annuity table is a financial reference tool that condenses the complex math of time value of money into a simple lookup chart. Instead of manually discounting or compounding every payment in a cash flow stream, the table provides factors that represent the cumulative effect of interest rates over multiple periods. These factors can then be multiplied by the payment amount to determine either the present value of a series of equal payments.

An annuity table offers a fast way to translate recurring payments into a single value that reflects either today’s dollars. By providing this shortcut, annuity tables allow individuals, businesses and financial professionals to analyze payment streams with consistency and precision across different interest rate and time period scenarios.

How to Read an Annuity Table

With an annuity table, you won’t need to do the calculation. You can get the information you need simply from reading the chart.

An annuity table is laid out in a grid format, with periods usually listed down the left-hand column and interest rates across the top row. To use it, locate the row that matches your payment periods and the column that matches your discount rate. The figure at their intersection is a factor. Multiply that factor by the payment amount, and the result gives you the present value of the annuity.

Here is the annuity table for an ordinary annuity (payments made at the end of the period):

Annuity Table for Ordinary Annuities

Number of Periods (n)	1%	2%	3%	4%	5%	6%	8%	10%	12%
1	0.990	0.980	0.971	0.962	0.952	0.943	0.926	0.909	0.893
2	1.970	1.942	1.913	1.886	1.859	1.833	1.783	1.736	1.690
3	2.941	2.884	2.829	2.775	2.723	2.673	2.577	2.487	2.402
4	3.902	3.808	3.717	3.630	3.546	3.465	3.312	3.170	3.037
5	4.853	4.713	4.580	4.452	4.329	4.212	3.993	3.791	3.605
6	5.795	5.601	5.417	5.417	5.076	4.917	4.623	4.355	4.111
7	6.728	6.472	6.230	6.002	5.786	5.582	5.206	4.868	4.564
8	7.652	7.325	7.020	6.733	6.463	6.210	6.210	6.210	4.968
9	8.566	8.162	7.786	7.786	7.108	6.802	6.247	5.759	5.328
10	9.471	8.983	8.530	8.111	7.722	7.360	6.710	6.145	5.650
11	10.368	9.787	9.253	8.760	8.306	7.887	7.139	>6.495	5.938
12	11.255	10.575	9.954	9.385	8.863	8.384	7.536	6.814	6.194
13	12.134	11.348	10.635	9.986	9.394	8.853	7.904	7.103	6.424
14	13.004	12.106	11.296	10.563	9.899	9.295	8.244	7.367	6.628
15	13.865	12.849	11.938	11.118	10.380	9.712	8.559	7.606	6.811
16	14.718	13.578	12.561	11.652	10.838	10.106	8.851	7.824	6.974
17	15.562	14.292	13.166	12.166	11.274	10.477	9.122	8.022	7.120
18	16.398	14.992	13.754	12.659	11.690	10.828	9.372	8.201	7.250
19	17.226	15.678	14.324	13.134	12.085	11.158	9.604	8.365	7.366
20	18.046	16.351	14.877	13.590	12.462	11.470	9.818	8.514	8.514
21	18.857	17.011	15.415	14.029	12.821	11.764	10.017	8.649	7.562
22	19.660	17.658	15.937	14.451	13.163	12.042	10.201	8.772	7.645
23	20.456	18.292	16.444	14.857	13.489	12.303	10.371	8.883	7.718
24	21.243	18.914	16.936	15.247	13.799	12.550	10.529	8.985	7.784
25	22.023	19.523	17.413	15.622	14.094	12.783	10.675	9.077	7.843
26	22.795	20.121	17.877	15.983	14.375	13.003	10.810	9.161	7.896
27	23.560	20.707	18.327	16.330	14.643	13.211	10.935	9.237	7.943
28	24.316	21.281	18.764	16.663	14.898	13.406	11.051	9.307	7.984
29	25.066	21.844	19.188	16.984	15.141	13.591	11.158	9.370	8.022
30	25.808	22.396	19.600	17.292	15.372	13.765	11.258	9.427	8.055

For example, suppose you have an annuity that pays you $1,000 per month at a 6% discount rate and you have eight payments remaining. locate the row for eight periods and the column for 6%. The factor at that intersection is 6.210. By multiplying the factor by the payment amount ($1,000 × 6.210) you find that the series of payments has a present value of $6,210. In other words, this is the equivalent amount those eight future payments are worth in today’s dollars.

Different types of annuities (variable annuities, for instance) will have different tables. Talk to your financial advisor or annuity company to make sure you are using the correct table.

Ordinary Annuity vs. Annuity Due

Annuities differ based on when payments occur. With an ordinary annuity (discussed above), cash flows are made at the end of each period, such as monthly loan installments or bond interest. Because payments arrive later, their present value is slightly reduced.

An annuity due, on the other hand, requires payments at the beginning of each period (common with rent or insurance premiums). Since these payments are received earlier, they carry greater present value, and the factors in an annuity due table are higher than those in an ordinary annuity table.

The timing of payments is what distinguishes the two, and annuity tables adjust accordingly. Ordinary annuity tables assume end-of-period cash flows, while annuity due tables shift the calculation to reflect earlier payments. Recognizing which structure applies is essential to selecting the correct table and accurately valuing the payment stream.

How an Annuity Table Can Help You

As discussed above, an annuity table helps you determine the present value of an annuity. Once you’ve found that number, you can make more informed investment decisions to build the best possible retirement portfolio for you.

Lottery winners, for instance, often have to make a decision about whether to take a lump sum payment or take their money in the form of an annuity. Using the annuity table, you can see what the present value of the annuity is. If it is less than the lump sum offered, taking the lump sum and investing it is probably the better option.

For more common use, you can use the annuity table to simply know how much your annuity is worth so that you have a clearer picture of your portfolio’s value.

Bottom Line

Using basic information about your annuity, an annuity table can help you find out the present value of your annuity. Once you have this information you can make more informed decisions about your finances because you’ll know exactly how much your annuity is worth in current dollars, given an assumed discount rate. Make sure you’re using the right table for the type of annuity you have.

Retirement Tips

For help with annuities, hire a financial advisor to make sure you’re taking the right steps for your retirement. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
If annuities aren’t your speed, explore other options for retirement income. At the very least, you should invest in your 401(k), provided your company offers one. Find out the projected value of your 401(k) by the time you retire with our free 401(k) calculator.
Don’t forget, you’ll also likely receive some money from the government when you retire. Find out what your check from Uncle Sam might look like with SmartAsset’s Social Security calculator.