Annuity Payout Calculator
Work out the fixed amount you can draw from a lump sum over a chosen term, plus total payout and total interest.
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At a glance:Annuity payout derives the fixed periodic withdrawal from a lump sum until principal and interest are exhausted (ordinary annuity, end-of-period): a = PV / [(1 - (1 + i)^-n) / i], where i = annual rate / payments per year and n = years x payments per year. Total payout = a x n; total interest = total payout - PV.
Formula
Ordinary annuity payout = PV × r / (1 − (1 + r)^(−n)).
Annuity due payout = PV × r / (1 − (1 + r)^(−n)) × (1 + r).
Where PV = present value, r = rate per period, n = number of periods.
$$a = \\dfrac{PV}{\\dfrac{1 - (1 + i)^{-n}}{i}}$$$$i = \\dfrac{\\text{Annual rate}}{m}, \\quad n = \\text{Term (years)} \\times m$$How to Use
- Enter the initial principal.
- Enter the annual rate during the payout and the payout term.
- View the monthly payout, total payout and total interest earned.
FAQ
How much can HK$100,000 pay out a year?
It depends on the term and rate. At 5% annual, paid monthly over 10 years, about HK$1,061 a month. A longer term means a smaller monthly payout; a higher rate means more, because the unwithdrawn balance keeps earning.
Why is the total payout more than the principal?
Because the unwithdrawn balance keeps earning interest during the payout, and that interest is also paid out. So total payout = principal + interest earned.
How does this differ from an annuity accumulation?
Accumulation is the 'saving' phase — regular deposits grow to a future value; payout is the 'spending' phase — deriving the periodic withdrawal from a lump sum until it is used up. They are the two ends of an annuity's life.
How is annuity payout different from a perpetuity?
An annuity payout exhausts the principal over a fixed term (balance reaches zero). A perpetuity spends only the interest (withdrawal = principal x periodic rate) and keeps the principal forever. Higher payout if you exhaust it; perpetuity preserves capital but pays far less.
Will an actual insurance annuity match this?
Usually not exactly. This is a simplified model (fixed rate, no fees). Real annuities may have floating/non-guaranteed returns, charges, mortality-linked (lifetime) provisions and guarantees. Use this for concepts and estimates; rely on the policy illustration for actual figures.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.