Annuity calculator
Turn a lump sum into a level payout over a fixed term, and see how much of each payment is interest.
Method: Ordinary annuity, payments at end of periodReviewed Oct 2026
Your numbers
$
%
yrs
Results
Payout
$2,923/mo
For 25 years
Total received
$876,885
$376,885 of it interest
Future value if untouched
$1,740,645
At 5.00% for 25 years
Your principal $500,000 (57%)Interest earned $376,885 (43%)
Each year’s payouts
Principal returnedInterestFormula
PMT = PV · r ÷ (1 − (1 + r)⁻ⁿ)
With your numbers
PMT = $500,000 · 0.004167 ÷ (1 − (1 + 0.004167)^−300) = $2,922.95
In plain EnglishA $500,000 lump sum earning 5.00% can pay you $2,923 every month for 25 years before it runs out. Early payments are mostly interest; later ones draw down the principal until the balance reaches zero.
- 1Rate per period r = rate ÷ payments per year0.004167
- 2Number of payments n300
- 3Payment per period$2,922.95
- 4Total received PMT × n$876,885
- 5Interest earned = total − PV$376,885
- 6Future value PV(1 + r)ⁿ$1,740,645
YearPaid outInterestBalance
1$35,075$24,766$489,690
2$35,075$24,238$478,853
3$35,075$23,684$467,462
4$35,075$23,101$455,488
5$35,075$22,489$442,901
6$35,075$21,845$429,670
7$35,075$21,168$415,762
8$35,075$20,456$401,143
9$35,075$19,708$385,776
10$35,075$18,922$369,622
11$35,075$18,096$352,642
12$35,075$17,227$334,794
13$35,075$16,314$316,032
14$35,075$15,354$296,310
15$35,075$14,345$275,580
16$35,075$13,284$253,788
17$35,075$12,169$230,882
18$35,075$10,997$206,804
19$35,075$9,765$181,494
20$35,075$8,471$154,889
21$35,075$7,109$126,923
22$35,075$5,679$97,526
23$35,075$4,175$66,625
24$35,075$2,594$34,144
25$35,075$932$0
Is this a quote from an insurer?
No. It is the math of a fixed-term annuity. Commercial annuities include fees, mortality pricing and riders.
What is the future value shown?
What the same lump sum would grow to if left untouched at the same rate for the whole term.