Calculate the regular periodic payout a lump sum can provide over a chosen number of years, fully depleting the balance by the end.
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This is the reverse of a loan payment formula: Payout = Lump Sum × r ÷ [1 − (1+r)^−n], where r is the interest rate per period and n is the total number of payments. The remaining balance keeps earning interest throughout the payout period, which is why the total payout is higher than the original lump sum.
For example, a 200,000 lump sum earning 5% annually, paid out monthly over 20 years, provides about 1,320 per month, totaling roughly 316,778 over the full period.
This assumes a constant interest rate for the entire payout period and doesn't factor in inflation eroding the purchasing power of fixed payments over time, or any fees an actual annuity product might charge. Use it as a planning estimate, not a substitute for an actual annuity quote.
Yes, this calculator solves for the exact periodic payout that fully depletes the lump sum (principal and all earned interest) by the end of the period you enter, with nothing left over.
That's a different calculation, a perpetuity, where you'd only withdraw the interest earned and never touch principal. This calculator instead spends down the full balance over your chosen period.
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