An annuity calculator helps you to calculate the value of a particular annuity and make payment of the lump sum amount. Annuity calculators calculate the value of your annuity payment by summing up all future annuity payments into a lump sum amount. Using these annuity calculators enables you to plan and invest your money for a secure future. Annuity calculators help to determine the amount of money you will receive in future and also help to choose an appropriate insurance policy.

Annuities are contracts in which the buyer of the annuity agrees to pay a lump sum payment in certain intervals over a fixed period of time. The annuitant is given an annuity at the time of purchase and receives periodic payments, either fixed or variable, from the seller, known as the annuitant. A purchaser does not have to deal with taxes or take care of any other immediate financial needs while buying annuities. It is recommended to get the services of a qualified financial advisor before deciding to buy annuities.

Annuity calculators use fixed rate annuities where the payments remain constant throughout the life of the annuity. They use discounted annuities where the rate of return increases over time. Most annuities come with a guaranteed minimum monthly interest rate. The annuity payments are calculated by dividing the amount of initial investment by the current monthly interest rate and then multiplying the result by the number of years allowed in the contract. The present value is obtained by adding the present day value of each periodical payment to the total initial investment.

Annuity calculators determine the value of an annuity by applying a combination of different factors such as the rate of interest, tenure of contract, and the total amount of initial investment. After determining the value of the annuity it is necessary to calculate the initial payment that will be received upon retirement. This initial payment amount is equal to the present value multiplied by the number of years expected to be invested. When using annuity calculators, it is advisable to ensure that the rates of interest and term of contracts agreed upon by the buyer are in fact used.

People who are planning to retire in the future and are not yet in possession of their first annuity may choose to have one of their annuities converted into cash value. Under this type of agreement, the annuitant transfers his/her annuity to another person who will then invest the cash value in an additional annuity. This type of arrangement allows the person receiving the money to earn interest on the principal which is then paid to the original holder of the annuity. In order to determine how much interest will be earned on the principal, it is necessary to multiply the present value by the current discount rates for each of the five years.

In order to receive payments in the future a person may sell part or all of his/her annuity. The selling price given in the offer must be equal to or less than the face value of the annuity. If the seller does not receive an offer that meets the criteria of an acceptable offer, he has the right to decline the deal and not receive any payments for the next year. If the seller agrees to sell part of his annuity, he must also provide a written statement with the following information: the present value and future value of sales, details about the payment terms, description of risks involved, and a description of the intended sale.