Annuity Payment Calculator
Find the fixed payment that pays off a principal.
Results update as you type.
How it works
The payment shown here is the fixed amount, paid at regular intervals, that fully pays off a principal over a set term at a given interest rate. It matters because this single figure underlies mortgages, car loans, personal loans and structured payouts alike: any time a lump sum is settled through equal periodic payments, this is the math that sets the amount. This annuity payment calculator converts your annual rate to the rate per payment period, counts the total number of payments, and applies the amortization formula to find the payment that exactly zeroes the balance by the end of the term, then reports the total you will pay and how much of that is interest. The formula is the standard used across lending because it correctly balances interest and principal in every payment — early payments are mostly interest, later ones mostly principal — so the balance reaches zero precisely on schedule. Borrowers use it to size a loan payment before committing, to compare terms and rates, and to see the true cost of borrowing in the total-interest figure; retirees and planners use the same math in reverse to see what fixed payout a savings pool can sustain. A longer term lowers each payment but raises total interest, while a higher rate raises both. The result assumes a fixed rate and regular equal payments, so it is an accurate baseline; real loans may add fees, taxes or insurance on top.
Payment = P × r ÷ (1 − (1 + r)^−N), r = annual rate ÷ payments per year, N = years × payments per year
P is the principal, r is the interest rate per payment period (annual rate divided by payments per year), and N is the total number of payments. The term (1 − (1 + r)^−N) is the present-value factor for a stream of N equal payments; dividing the principal times r by it yields the payment whose discounted stream exactly equals the principal today. That is why the balance amortizes to zero at the final payment. When the rate is zero, there is no interest and the payment is simply the principal spread evenly across all N periods.
Source:Amortization / annuity payment formula
We review all our tools from time to time to ensure accuracy.
Worked example
How to use this calculator
- 1
Enter your values
Enter principal amount, annual interest rate and term.
- 2
Adjust the options
Adjust payments per year if they apply — sensible defaults are already set.
- 3
Read your result
Payment per period updates instantly as you type — no button to press.
Frequently asked questions
What is an annuity in this context?
Here an annuity means a series of equal payments made at regular intervals, which is the structure behind most loans and many payout arrangements. Whether you are repaying a mortgage or receiving fixed pension income, the same math applies: a present lump sum is converted into a stream of level payments over time. The word also refers to insurance products that pay income in retirement, and the payment formula on this page is the engine that prices those steady streams.
How does the term affect the payment?
A longer term lowers each payment because the principal is spread across more periods, but it raises the total interest you pay, since the balance is outstanding for longer. A shorter term does the opposite — higher payments but far less interest overall. This trade-off between affordability and total cost is central to choosing a loan. Try different terms in the tool to see how the periodic payment and the total interest move in opposite directions.
What happens when the interest rate is zero?
With a zero rate there is no interest to pay, so the payment is simply the principal divided by the total number of payments, and the total interest is zero. This case can arise with promotional financing or interest-free installment plans. The calculator handles it directly rather than dividing by zero in the standard formula. It is a useful benchmark: comparing a real loan's payment against this zero-rate figure shows exactly how much the interest is costing you each period.
Can I use this for retirement payouts?
Yes. The same formula that sizes a loan payment also determines how much a fixed pool of savings can pay out each period over a set number of years at an assumed return. Enter your savings as the principal, your expected return as the rate, and your payout horizon as the term to see the sustainable regular withdrawal. Keep in mind it assumes a constant return and a fixed end date, so real retirement planning should also account for market swings and longevity.
Does the payment include taxes and fees?
No. This calculator returns the pure principal-and-interest payment. Real-world loans often bundle additional costs into what you actually pay — a mortgage may add property taxes and insurance to the monthly bill, and many loans carry origination or servicing fees. Those extras are not part of the amortization math shown here. Use this figure as the core payment, then add any known taxes, insurance or fees separately to estimate your true out-of-pocket cost each period.