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 ($)
- AR is the annuity rate (%/year)
How to Calculate Annuity Cost?
The following example problems outline how to calculate Annuity Cost.
Example Problem #1:
- First, determine the account value ($). 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)
