Individual
- Home>
- Blog>
- Investments>
- Money Management
Invest ₹15K/Month & get ₹1.14 Cr$2 Now!
Do you have enough savings to retire comfortably, especially with the cost of living rising rapidly? With ageing, medical needs arise, and in-patient treatment becomes way too expensive. Your existing savings and investments may not be enough to give you a comfortable life after retirement. You need a proper retirement plan, and this is where an annuity table become important....Read More
Trust of 20+ Years in Industry
Written bySumit Narula
Investment Writer
Published 28th February 2026
Reviewed byPrateek Pandey
Last Modified 28th February 2026
Investment Expert
What is an Annuity Table?
An annuity table is a simplified, pre-calculated tabular representation of certain factors to help you understand both the current and future values of your regular payments. To understand this clearly, let us first understand the meaning of annuity.
An annuity refers to a long-term contract with an insurer, where you invest money, either all at once or over time. In return, you receive a guaranteed income, usually after retirement. The primary purpose of an annuity is to provide you with financial support during your retirement years.
An annuity table shows pre-calculated values based on a fixed interest rate and a specific time period. It helps you to learn about annuity options. You can quickly find today’s investment amount or the future value of your payments by referring to this table.
Whether the payout starts now or later, these tables work for different annuity types. They allow you to compare scenarios, plan income with more clarity, and go with what aligns with your financial targets. You can consider it a simple calculator that can help you determine your financial readiness for retirement.
Purpose of Annuity Tables in Financial Planning
Annuity tables play an important role in financial planning. They help you estimate how much money you need to invest in an annuity plan to receive your target monthly income after retirement. An annuity table helps you avoid guesswork and quickly arrive at an accurate number. With multiple such tables handy, you can also compare different annuity plans and choose the right one.
Components of an Annuity Table
An annuity table has the following key components:
You multiply the annuity factor by regular payment (PMT) to figure out the present value (PV) or future value (FV) of your installments. It simplifies complex calculations and is useful when considering retirement or long-term planning.
- Monthly interest rate (X, axis),
- Number of periods (Y, axis),
- Point of intersection between the two, and
- Annuity factor.
You multiply the annuity factor by regular payment (PMT) to figure out the present value (PV) or future value (FV) of your installments. It simplifies complex calculations and is useful when considering retirement or long-term planning.
Interest Rate (Discount Rate)
Interest rate, or discount rate, indicates the value of future payments in today's money. It includes the time value of money concept, which means money now is more valuable than the same amount in the future.
Simply, the discount rate is the percentage used to determine how much future money is worth today. It makes the table a very simple-yet-fast tool for people who are planning their retirement or investments.
- Lower discount rate: The value of future payments is closer to today's money; the present value is higher.
- Higher discount rate: Future payments are given less value compared to today’s money; the present value is lower.
Simply, the discount rate is the percentage used to determine how much future money is worth today. It makes the table a very simple-yet-fast tool for people who are planning their retirement or investments.
Number of Periods (Tenure)
The number of periods, or tenure, denotes the duration for which the series of payments will continue.
Essentially, it is a count of all individual payment intervals that exist over the life of the annuity.
Let's take an example of a person who wants to save money by depositing ₹1,000 every year into an annuity for 5 years at an interest rate of 6% per year. The question before him is: how much money will he have at the end?
Result: After 5 years, the investor will have approximately ₹5,637, made up of ₹5,000 principal and ₹637 interest.
Essentially, it is a count of all individual payment intervals that exist over the life of the annuity.
- Period: The elapsed time between two consecutive payments (the options being monthly, quarterly, or yearly).
- Number of Periods (Tenure): The total of these intervals, which answers the question, "How many payments will be made in total?"
Let's take an example of a person who wants to save money by depositing ₹1,000 every year into an annuity for 5 years at an interest rate of 6% per year. The question before him is: how much money will he have at the end?
- Step 1: Identify the variables
- Payment (PMT) = ₹1,000 per year
- Interest rate (i) = 6% or 0.06
- Number of periods (n) = 5 years
- Step 2: Use the future value (FV) formula for an ordinary annuity
FV=PMT×i(1+i)n−1/i
where PMT = 1,000, i = 0.06, and n = 5 - Step 3: Fill in the values FV=1000×0.06(1+0.06)5−1/0.06
- Step 4: Do a stepwise calculation
- (1 + 0.06)5 = 1.338225, subtracting 1 gives 0.33822.
- Divided by 0.06 yields 5.63708.
- Multiplied by ₹1,000 equals ₹5,637.08 (rounded to ₹5,637)
- Step 5: Multiply by the payment FV = 1000 × 5.637 ≈ ₹5,637 (FV = 1000 times 5.637 approx.)
Result: After 5 years, the investor will have approximately ₹5,637, made up of ₹5,000 principal and ₹637 interest.
Present Value and Future Value Factors
1. What they are:
- Present Value Factor (PVAF/PVIFA): Gives you the current worth of a series of scheduled payments. The process is called discounting.
- Future Value Factor (FVAF/FVIFA): Indicates the accumulation of constant payments over time. This method is called compounding.
Example of an Annuity Formula Table (Ordinary Annuity):
This provides the "Factor" for various combinations of interest rates and periods.
This table shows the current value of future income, depending on the timing of payments and the interest rate.
| Year (n) | PV Factor (5%) | PV Factor (8%) | FV Factor (5%) | FV Factor (8%) |
|---|---|---|---|---|
| 1 | 0.952 | 0.926 | 1.050 | 1.080 |
| 2 | 1.859 | 1.783 | 2.050 | 2.166 |
| 3 | 2.723 | 2.577 | 3.153 | 3.246 |
| 4 | 3.546 | 3.312 | 4.310 | 4.506 |
| 5 | 4.329 | 3.993 | 5.526 | 5.867 |
| 10 | 7.722 | 6.710 | 12.578 | 14.487 |
This table shows the current value of future income, depending on the timing of payments and the interest rate.
Types of Annuity Tables
An annuity value table comes in different types to simplify calculations. Both Present Value (PV) tables and Future Value (FV) tables help plan retirement, investments, or loans efficiently.
Present Value of Annuity Table
A present value of annuity table (PV) shows how much a series of future payments is worth today.
PV = PMT x PVIFA (present value factor formula)
This table is useful when you wish to know:
Present value annuity tables are typically used for:
They help investors and retirees understand the real value of future income.
PV = PMT x PVIFA (present value factor formula)
This table is useful when you wish to know:
- How much money is needed today to receive a fixed income later
- The current worth of pension or annuity payments
- Whether a future income stream is financially attractive
Present value annuity tables are typically used for:
- Retirement planning
- Pension fund calculations
- Insurance benefit analysis
They help investors and retirees understand the real value of future income.
Future Value of Annuity Table
A future value of annuity table (F) shows how regular payments grow over time due to compounding.
FV = PMT × FVAF (future value annuity factor)
This table can assist in answering questions such as:
Future value annuity tables are helpful for:
Together, these two tables give a complete picture of how compounding works over time.
FV = PMT × FVAF (future value annuity factor)
This table can assist in answering questions such as:
- What will my savings amount be if I invest regularly?
- What will be the value of my retirement corpus after many years?
Future value annuity tables are helpful for:
- Long-term savings planning
- Retirement corpus estimation
- Investment goal setting
Together, these two tables give a complete picture of how compounding works over time.
How to Use an Annuity Table?
Most people think that an annuity table is too complicated to use. However, they become easy to follow once you are familiar with below steps:
Step-by-Step Guide to Using an Annuity Table
The following are the steps to using annuity tables:
- Step 1: Get a clear view of your annuity: Check whether the payouts begin now or later. If payments start right away, it is an immediate annuity. If they start paying later, it is a deferred annuity. The annuity table you use will depend on your choice of annuity.
- Step 2: Decide on the correct interest rate: Different annuity tables apply different interest rates. Choose the one that fits your investment returns or the rate promised by your plan.
- Step 3: Select the time required: Plan the payout tenure, e.g. 10, 15, or 20. The number of payment periods helps you find the correct annuity factor.
- Step 4: Locate the table factor: Find the factor where the interest rate and investment period intersect.
- Step 5: Calculate by using the annuity factor: Pick the payment you wish to receive and multiply it by the correct factor from the table. This will give you either the lump sum you need or the total payout over the chosen period.
- Double check your calculations: Ensure that your figures are correct and adequate, particularly in the case of retirement income planning.
Example: Calculating Present Value of an Annuity
Let us consider the calculation of a simple annuity using a present value table.
Situation: You will receive 12,000 each year for 25 years. The discount rate is 7%.
From a present value annuity table:
Calculation:
₹12,000 × 11.65 = ₹1,39,800
Result:
At a 7% discount rate, the present value of receiving 12,000 annually for 25 years is about 1.40 lakhs.
Situation: You will receive 12,000 each year for 25 years. The discount rate is 7%.
- Step 1: Yearly payment = ₹12,000
- Step 2: Interest rate = 7%
- Step 3: Investment period = 25 years
From a present value annuity table:
- PV factor at 7% for 25 years ≈ 11.65
Calculation:
₹12,000 × 11.65 = ₹1,39,800
Result:
At a 7% discount rate, the present value of receiving 12,000 annually for 25 years is about 1.40 lakhs.
Example: Calculating Future Value of an Annuity
Now, consider a future value calculation.
Situation: You put ₹6,000 each year into an investment for 20 years. The expected return is 8%.
From a future value annuity table:
Calculation:
₹6,000 × 45.76 = ₹2,74,560
Result:
Your total savings may increase up to ₹2.75 lakhs at the end of 20 years.
This shows the power of compounding and regular investments.
Situation: You put ₹6,000 each year into an investment for 20 years. The expected return is 8%.
From a future value annuity table:
- FV factor at 8% for 20 years ≈ 45.76
Calculation:
₹6,000 × 45.76 = ₹2,74,560
Result:
Your total savings may increase up to ₹2.75 lakhs at the end of 20 years.
This shows the power of compounding and regular investments.
Annuity Table vs Annuity Calculator
With several digital tools available at our disposal, many people wonder if these tables are still useful.
The answer is yes, as both tools serve different purposes.
| Element | Annuity Table | Annuity Calculator |
|---|---|---|
| Method | Manual lookup | Automated |
| Ease of learning | Very high | Moderate |
| Accuracy | Approximate | Highly precise |
| Customisation | Limited | Extensive |
| Best for | Education, estimates | Detailed planning |
Although the tables help understand concepts and make quick comparisons, calculators are more suitable for accurate financial planning. Thus, having both tables and a calculator can help be sure of the current and future figures.
Summary: How Annuity Tables Help in Retirement Planning?
Annuity tables make retirement planning easier by indicating the value of your future income in today's terms (PV), or the amount of money (FV) your contributions will fetch over a certain period. They help figure out how much you need to invest and determine the right tenure and interest rate. Now that you are familiar with annuity tables and the right way to use them for annuity planning, explore Axis Max Life pension plans to estimate your retirement corpus. Select the right pension plan to ensure a steady income post retirement.
Explore retirement and pension plans to know more about pension plans in further detail.
FAQs on Annuity Table
Are annuity tables different for monthly and yearly payments?
Yes. Different annuity tables fit different payment frequencies. A monthly table considers 12 periods in a year, whereas a yearly table only counts 1 period in a year. Monthly tables usually show slightly higher values due to compounding.
How do you use an annuity table?
You need to multiply the periodic payment by the factor that matches your interest rate and number of periods.
What is the purpose of an annuity table?
Annuity tables help determine the present or future value of a series of fixed payments.
What is the difference between a present value and future value annuity table?
A present value table helps to discount future payments back to their current value, whereas a future value table forecasts growth over time.
Why are annuity tables important in retirement planning?
They are very useful for estimating guaranteed income and for accurately planning retirement payouts.
How is an annuity table different from an annuity calculator?
An annuity table uses fixed reference values, whereas a calculator computes results instantly using formulas.
Can annuity tables be used for insurance or pension planning?
Yes. Almost all calculations of insurance, pension, and annuity products involve annuity tables.
What inputs are required to use an annuity table?
Payment amount, interest rate, and number of periods.
How accurate are annuity tables compared to calculators?
Tables provide close estimates. Calculators offer more precise, decimal-based results.
Are annuity tables still relevant today?
Yes. They are the basic tools for learning in finance and actuarial education.
ARN: Feb26/Bg/SN2
Sources:
https://www.indiatoday.in/business/personal-finance/story/ulips-mutual-funds-or-stocks-what-is-the-best-for-long-term-wealth-creation-2721078-2025-05-07
https://www.moneycontrol.com/news/business/personal-finance/heres-how-you-can-measure-your-ulip-returns-while-reviewing-investments-2922861.html
https://www.motilaloswalmf.com/investor-education/blog/absolute-return-in-mutual-funds-meaning-formula-calculation-procedure/#:~:text=The%20formula%20for%20calculating%20absolute,to%20calculate%20the%20annualized%20returns
https://www.moneycontrol.com/banking/gst-on-insurance-policyholders-have-a-lot-to-know-post-gst-2-0-here-s-why-article-13533078.html
https://www.indiatoday.in/business/personal-finance/story/ulips-mutual-funds-or-stocks-what-is-the-best-for-long-term-wealth-creation-2721078-2025-05-07
https://www.moneycontrol.com/news/business/personal-finance/heres-how-you-can-measure-your-ulip-returns-while-reviewing-investments-2922861.html
https://www.motilaloswalmf.com/investor-education/blog/absolute-return-in-mutual-funds-meaning-formula-calculation-procedure/#:~:text=The%20formula%20for%20calculating%20absolute,to%20calculate%20the%20annualized%20returns
https://www.moneycontrol.com/banking/gst-on-insurance-policyholders-have-a-lot-to-know-post-gst-2-0-here-s-why-article-13533078.html
Share your Valuable Feedback
4.4
Rated by 876 customers
Was the Information Helpful?
Very Good
Popular Searches
Online Sales Helpline
- Whatsapp: 7428396005Send ‘Quick Help’ from your registered mobile number
- Phone: 0124 648 890009:30 AM to 06:30 PM
(Monday to Sunday except National Holidays) - service.helpdesk@axismaxlife.comPlease write to us incase of any escalation/feedback/queries.
Customer Service
- Whatsapp: 7428396005Send ‘Hi’ from your registered mobile number
- 1860 120 55779:00 AM to 6:00 PM
(Monday to Saturday) - service.helpdesk@axismaxlife.comPlease write to us incase of any escalation/feedback/queries.
NRI Helpdesk
- +91 11 71025900, +91 11 61329950 (Available 24X7 Monday to Sunday)
- nri.helpdesk@axismaxlife.comPlease write to us incase of any escalation/feedback/queries.
