Enter the account value ($) and the annuity rate (%/year) into the Annuity Cost Calculator. The calculator will evaluate and display the Annuity Cost.

## Annuity Cost Formula

The following formula is used to calculate the Annuity Cost.

AC = AV * AR/100

- Where AC is the Annuity Cost ($/year)
- AV is the account value ($)
- AR is the annuity rate (%/year)

To calculate the annuity cost, multiply the account value by the annuity rate.

## How to Calculate Annuity Cost?

The following example problems outline how to calculate Annuity Cost.

Example Problem #1:

- First, determine the account value ($). The account value ($) is given as 14000.
- Next, determine the annuity rate (%/year). The annuity rate (%/year) is provided as 4.
- Finally, calculate the Annuity Cost using the equation above:

AC = AV * AR/100

The values given above are inserted into the equation below:

AC = 14,000* 4/100 = 560.00 ($/year)

Example Problem #2:** **

The variables needed for this problem are provided below:

account value ($) = 6000

annuity rate (%/year) = 7

Entering these values and solving gives:

AC = AV * AR/100 = 420.00 ($/year)