In an annuity due, the first cash flow of the annuity occurs at the beginning of the period whereas in case of an ordinary annuity, the first cash flow of annuity occurs at the end of the period.
The present value of annuity due is calculated using the following formula :
PV = A + [ A* [ ( 1 – ( 1 / ( 1 + r ) ( n – 1 ) )) / r ] ]
PV = Present value of annuity due ; A = Amount of annuity ; r = Discount rate / rate of interest ; n = Number of years ;
In the calculator below insert the values of Amount of annuity, Discount rate and Number of years to arrive at the Present value of Annuity due.