• AV is the account value ($) • AR is the annuity rate (%/year) ## How to Calculate Annuity Cost? The following example problems outline how to calculate Annuity Cost. Example Problem #1: 1. First, determine the account value ($). The account value ($) is given as 14000. 2. Next, determine the annuity rate (%/year). The annuity rate (%/year) is provided as 4. 3. Finally, calculate the Annuity Cost using the equation above: AC = AV * AR/100 The values given above are inserted into the equation below: AC = 14,000* 4/100 = 560.00 ($/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)