## How to use the present value of annuity table

To calculate the current value of your annuity scheme easily and within the shortest time possible, you will require a **present value of annuity table.** When evaluating your annuity program, you should take into account the money time-value, or its current and future value. In addition, we can employ the current annuity table to compute the prospect flow of annually cash streams from annuity.

Annuity phases

## An present value of annuity table program includes two phases:

- The accumulation phase and
- The distribution phase

Annuities operate by allowing one group to deposit money into the account while another group pledging to repay it. During the accrual phase, the cash goes into the account, and rewarded during distribution stage. Both phases can be a single payment where, there is minor period between the preceding imbursement made into the account and the initial disbursement made from the account. In case either of the phases is at least two payout, it is an annuity.

### Phases of present value of annuity table :

** accrual and circulation**

Normally, annuity is a venture where a particular party deposits money in account with the second party pledging to pay it back. The accumulation or accrual phase is that time which the cash goes into annuity. Annuity will exist when either of the two phases or stages represents at least two payments. You can work out the current value of the chain of annuity for each payout in the similar mode as for a single sum just by doing the same computation for every payout and then summing the payment together. However, we can compute the annuity present value by using a mathematical formula.

The formula

We can employ the following formula to calculate the value of annuity:

X=P*[(1+L) m-1]/ (1+L) m*L

Where

m represents the period numbers

X represent the current or initial principle amount value

P represents the payment made at the end of each period

L represents the rate of discount for every period

In case you do not want to do the calculation by yourself, you can employ a present value immunity table. The current value annuity table allows you determine the present value of fiscal amounts to be paid at a future time. Some tables indicate the *present value of annuity table* each amount designated for payment at the end of a precise period in the future, with varying rates interests compounded yearly. To utilize the table, look for your selected interest rate amount in the vertical column. After which, you find the number of the needed years to receive payment in the horizontal column. The point of intersection of these two columns presents the dollar value.

The annuity table gives a factor, based on the rate of discount and period, by which we can multiply the annuity payout to find its current value. For instance, we can employ an annuity table to compute the present value of annuity that paid $ 20,000 a year for 10 years, with 3% interest rate projection. You can easily get present value of annuity table online to assist you in calculation. There are many types of annuity table online.