Deferred Fixed Annuity Calculator

Instructions:
  • Enter the required financial information including Principal Amount, Annual Interest Rate, Number of Years, Compounding Frequency, Regular Contributions (optional), and Currency Symbol.
  • Click the "Calculate" button to perform the calculation and view the results.
  • The results will include the Future Value and Total Interest Earned.
  • The "Calculation Details" section provides information about the formula used for calculation.
  • Your calculation history is displayed in the "Calculation History" section.
  • Use the "Clear Entries" button to reset the entries and start a new calculation.
  • Enjoy using the tool!
Calculation History:

    A deferred fixed annuity is a contract between you and an insurance company. You pay a lump sum of money to the insurance company, and in return, the insurance company guarantees to pay you a fixed interest rate on your investment for a specific period. The interest rate is fixed for the duration of the contract, and the insurance company guarantees to pay you a specific amount of money at the end of the contract.

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    Formulae

    The formula for calculating the value of a deferred fixed annuity is:

    A = P * (1 + r/n)^(n*t)
    

    Where:

    • A = the value of the annuity at the end of the contract
    • P = the principal amount invested
    • r = the annual interest rate
    • n = the number of times the interest is compounded per year
    • t = the number of years the annuity is held

    Benefits

    Deferred fixed annuities offer several benefits, including:

    • Guaranteed income: Deferred fixed annuities provide a guaranteed income stream at a later date, which can help you plan for retirement.
    • Tax-deferred growth: The earnings on your investment are tax-deferred until you withdraw them, which can help you save money on taxes.
    • Fixed interest rate: The interest rate on your investment is fixed for the duration of the contract, which can provide stability and predictability.
    • No contribution limits: There are no contribution limits on deferred fixed annuities, which means you can invest as much as you want.
    • Death benefit: Deferred fixed annuities provide a death benefit to your beneficiaries if you pass away before the end of the contract.

    Interesting Facts

    • Deferred fixed annuities are used as a retirement planning tool because they provide a guaranteed income stream at a later date.
    • Deferred fixed annuities are different from immediate annuities, which start paying you right away.
    • Deferred fixed annuities come in different types, including fixed, variable, and indexed.
    • The interest rate on a deferred fixed annuity is higher than the interest rate on a savings account or CD.
    • Deferred fixed annuities are not FDIC-insured, which means they are not backed by the government.
    References

    Here are some scholarly references that you may find useful:

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    Last Updated : 25 November, 2023

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