Deferred Annuity

2 formulas

Deferred annuity formulas calculate the value of payment streams that don't begin immediately but start after a specified waiting period. These are common in retirement planning, where contributions are made now but payouts begin years later, and in structured settlements with delayed payment schedules.

PV of Deferred Ordinary Annuity

Present value of an annuity that begins after a deferral period of d years.

PV = PMT \times \frac{1 - (1+k)^{-n}}{k} \times (1+k)^{-d}

PV of Deferred Annuity Due

Present value of a deferred annuity with payments at the beginning of each period.

PV = PMT \times \frac{1 - (1+k)^{-n}}{k} \times (1+k) \times (1+k)^{-d}