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:

  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)