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What is an annuity table?

A:

Quick Answer

An annuity table is a method for calculating the present value of an annuity, according to Investopedia. The table includes potential interest rates, the number of recurring payments and a series of present value factors based on their intersections.

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Full Answer

The first column of the annuity table typically contains the number of recurring payments, notes Accounting Coach. The column header contains the interest rates. The table provides a present value factor at each intersection of an interest rate and a recurring payment, which, multiplied by the recurring payment amount, calculates the annuity's present value.

Annuity tables use rounded factors and are not as accurate as financial calculators or software, explains Accounting Coach. Nevertheless, their use is widespread.

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