Present Value of Annuity Due Calculator
An annuity due pays at the beginning of each period, so every payment arrives one period earlier than in an ordinary annuity and is therefore worth more today. This is the structure of most rents, leases, and insurance premiums. This calculator applies the standard present-value-of-an-annuity-due formula: it discounts each payment back to today and applies the one-period-earlier adjustment factor. Enter the payment, the interest rate per period, and the number of payments to see the present value, the equivalent ordinary annuity value for comparison, and the total of the undiscounted payments.
Present value of annuity due formula
i = rate per period / 100
If i = 0: PV due = PMT * n
Else: PV ordinary = PMT * (1 - (1 + i)^-n) / i
PV due = PV ordinary * (1 + i)
Total payments = PMT * n
The (1 + i) factor reflects that each annuity-due payment occurs one period earlier than the corresponding ordinary-annuity payment. The present value of the annuity due is therefore always higher than the ordinary annuity by exactly that factor.
Worked example
Ten payments of $1,000 at 5 percent per period: PV ordinary = 1,000 * (1 - 1.05^-10) / 0.05 = $7,721.73. PV due = 7,721.73 * 1.05 = $8,107.82. The undiscounted total is $10,000.00.
Annuity due present value: frequently asked questions
What is an annuity due?
An annuity due is a series of equal payments made at the beginning of each period rather than the end. Rent, leases, and insurance premiums are common examples. Because each payment is received one period sooner than in an ordinary annuity, an annuity due is worth more today.
How does the annuity due formula differ from an ordinary annuity?
The present value of an annuity due equals the ordinary annuity present value multiplied by (1 plus i), where i is the periodic rate. This single factor shifts every payment forward by one period, which is why an annuity due always has a higher present value than an otherwise identical ordinary annuity.
What is the present value of an annuity due formula?
PV = PMT times (1 minus (1 plus i) to the power minus n) divided by i, all multiplied by (1 plus i). PMT is the payment, i is the rate per period, and n is the number of payments. When i is zero, PV is simply PMT times n.
When should I use annuity due instead of ordinary annuity?
Use annuity due when payments fall at the start of each period: most leases, rents, and subscription or insurance premiums are paid in advance. Use an ordinary annuity when payments fall at the end of the period, such as most loan repayments and bond coupons.
Official sources
- U.S. Securities and Exchange Commission: Investor.gov financial tools.
- U.S. Consumer Financial Protection Bureau: consumerfinance.gov.
Reviewed by the CalculatorHub team, edited by James Graham, 19 June 2026. See our methodology.