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 (%)

To calculate the initial value using reverse annuity, divide the final value by 1 plus 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)** = ?**