Annuity Payout Calculator
The Annuity Payout Calculator works out the fixed monthly payment a lump sum can provide over a set number of years at a given interest rate — useful for retirement income planning. The formula used is: payment = PV × [r(1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)], where r is the monthly rate and n is the number of months.
Formula
Payment = PV × [r(1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)]
- The Annuity Payout Calculator updates instantly when you change any value.
- Formula: Payment = PV × [r(1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)]
- Input definitions: • Lump Sum: the starting amount being paid out • Annual Rate %: the yearly interest the remaining balance earns (÷ 12 for the monthly rate r) • Years: how long the payout lasts (× 12 for the number of months n)
- This is the same formula used for a loan payment — here the 'loan' is the lump sum being paid back to you.
- A higher interest rate produces a larger monthly payout because the unpaid balance keeps earning interest.
Example Calculation
Inputs
- Lump Sum (PKR): 100000
- Annual Rate %: 5
- Years: 10
A PKR 100,000 lump sum earning 5% annually and paid out evenly over 10 years provides about PKR 1,061 per month.
Frequently asked questions
What does the annuity payout tell me?
It tells you the fixed monthly amount a lump sum can pay out over a chosen number of years while the remaining balance earns interest.
How is this different from the annuity (present value) calculator?
Here you start with a lump sum and solve for the payment. The present-value calculator starts with the payment and finds the lump sum.
Why does a higher rate increase the payout?
The unpaid balance keeps earning interest, so a higher rate lets each payment be larger while still depleting the balance over the term.
What rate should I enter?
Enter the annual rate as a plain number (for example 5 for 5%). It is converted to a monthly rate internally.
Is the payout before tax?
Yes. The result is gross monthly income before any tax on the payments.