Enter the final value ($) and the annuity rate (%) into the Reverse Annuity Calculator. The calculator will evaluate and display the initial principal amount.
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Reverse Annuity Formula
The following formula is used to calculate the Reverse Annuity.
IV = FV / (1+AR/100)
- Where IV is the Reverse Annuity ($)
- FV is the final value ($)
- AR is the annuity rate (%)
How to Calculate Reverse Annuity?
The following example problems outline how to calculate Reverse Annuity.
Example Problem #1:
- First, determine the final value ($).
- The final value ($) is given as: 1,000.
- Next, determine the annuity rate (%).
- The annuity rate (%) is provided as: 5.
- Finally, calculate the Reverse Annuity using the equation above:
IV = FV / (1+AR/100)
The values given above are inserted into the equation below and the solution is calculated:
IV = 1000 / (1+5/100) = 952.38 ($)
Example Problem #2:
For this problem, the variables required are provided below:
final value ($) = 6,000
annuity rate (%) = 10
Test your knowledge using the equation and check your answer with the calculator above.
IV = FV / (1+AR/100) = ?
