An annuity calculator or annuities calculator is a very handy device to help one calculate how much the future value of a savings investment plan. It could even be used to determine how much one’s pension fund is worth as annual income in one’s retirement, how much the balance of an investment declines over time, and how much fixed payment one would receive from a particular investment over time.
In financial terms, annuity is a series of fixed payments invested over a certain or specified period of time and could be classified by payment dates. The purchaser of the annuity, called the annuitant, is given by his or her insurance company a stream of payments over time. There are many different types of annuity contracts one could choose from and they are all complex, but they do provide benefits to the annuitant such as lifetime income.
Such example of annuity includes mortgage payments, insurance payments, and savings account deposits. Also, these payments or deposits are made over a particular period of time such as weekly, monthly, or yearly. Annuity calculators are often used to calculate the growth and payout of ones annuities such as determining the value of an ordinary annuity (also called annuity-intermediate) made at the end of a particular time period or interval.
There are already a number of these annuity calculators available over the internet, and each has its own means and formulas to calculate the annuity that it is designed for. Here are some that are available online and how each one works:
* Deferred Annuity Calculator
This calculator is designed for determining a final balance for fixed or variable annuities, which accumulate earnings over time that could be withdrawn in the future. The deferred annuity calculator compounds the balance over the specified time of the contract until it ends and determines the final account balance based on the following factors: initial investment, additional yearly contributions, contract term, and also maybe inflation adjustment.
* Immediate Annuity Calculator
This calculator is used for determining regular pay outs on immediate, fixed, or lifetime annuities. This kind of annuity begins to pay out within a year the contract is purchased, and would last until the initial investment + interest is expired. Immediate annuity calculators determine how much and how big the periodic payment would be basing on how long one wishes to receive them, how frequent these payments would be, and how much the annuitant had invested at the start of the contract.
* Index Annuity Calculator
This type of calculator is used for equity index annuity, which is similar to deferred annuity but it uses a different accumulation model. The Index Annuity Calculator does historical back-testing, allowing one to see how well an index annuity would fare in the market many years before. Calculations and market index tracking are made using annual reset, high water mark, or point-to-point as basis.
Anyone interested to find out his or her pay outs or any other variable of the annuity equation could try to use an annuity calculator to solve their problems.
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