Rentenversicherungsrechner
The detailed guide below is currently available in English.
Ordinary annuity vs. annuity due
An ordinary annuity pays at the end of each period; an annuity due pays at the beginning, so every payment is worth one extra period of interest: multiply the ordinary value by (1 + r). Rent is typically an annuity due (paid up front), while loan or bond payments are ordinary. The formulas are PV = PMT × [1 − (1+r)−n]/r and FV = PMT × [(1+r)n − 1]/r.
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What is this useful for?
Pricing any level cash flow: what a promise of $1,000 a year for ten years is worth today, or what saving $1,000 a year becomes. Insurance annuity contracts add mortality credits and fees on top of this base math.
What rate should I discount at?
Use the return you could otherwise earn with similar risk. Guaranteed annuities are often discounted near Treasury yields; riskier payment streams deserve higher rates and therefore lower present values.