Annuity & Break-Even Calculator

What does this calculator do?

This calculator combines two everyday finance tasks: valuing a stream of payments and checking whether a price or sales target is profitable. Use the annuity calculator to estimate the present value or future value of regular payments, including ordinary annuities, annuities due and growing annuities. Then use the break-even calculator to estimate the units, revenue, margin and markup needed to cover your costs.

How to use the annuity calculator

1. Enter the payment amount.
2. Choose whether payments happen at the end of each period or the beginning of each period.
3. Enter the annual interest or discount rate.
4. Choose yearly, quarterly or monthly periods.
5. Enter the number of periods.
6. Read the present value and future value results.

How to use the break-even calculator

1. Enter your selling price per unit.
2. Enter your variable cost per unit.
3. Enter your total fixed costs.
4. Optionally enter planned units, target margin or target markup.
5. Review contribution, break-even units, break-even revenue and expected profit.

Annuity and Break-Even Calculator Guide

This tool helps you answer two common finance questions: what is a stream of payments worth, and how much do you need to sell to cover your costs? The annuity side calculates present value and future value for regular payments. The pricing side calculates contribution, break-even units, break-even revenue, margin, markup and planned profit.

Present value shows what future payments are worth today after discounting. Future value shows what those payments could grow to by the end of the term. You can choose an ordinary annuity, where payments happen at the end of each period, or an annuity due, where payments happen at the beginning of each period.

Break-even shows the sales volume needed to cover fixed and variable costs. Margin measures profit as a percentage of selling price, while markup measures profit as a percentage of cost. They are related, but they are not the same: a 25% markup equals a 20% margin.

How Annuity, Break-Even, Margin and Markup Calculations Work

This plain-English guide explains the formulas behind the calculator and when to use each result. Use the annuity formulas when you are comparing regular payments over time, such as savings deposits, lease payments, subscriptions or investment cash flows. Use the break-even, margin and markup formulas when you are checking prices, costs and profit targets.

Annuity Basics (PV & FV)

An annuity is a stream of equal payments at regular intervals (monthly, quarterly, yearly). You’ll meet two timing types:

• Ordinary annuity: payments at the end of each period (typical loan or savings deposit).
• Annuity due: payments at the beginning of each period (e.g., rent). Values are the ordinary result × (1 + r).

Present Value (PV) discounts future payments back to today; Future Value (FV) compounds payments forward. In our tool, you enter an annual rate; we convert it to an effective per-period rate based on your chosen unit (year/quarter/month).

• Level annuity PV: PV = P × [1 − (1 + r)⁻ⁿ] / r
• Level annuity FV: FV = P × [(1 + r)ⁿ − 1] / r
• Growing annuity PV (payment grows at g): PV = P × [1 − ((1 + g)/(1 + r))ⁿ] / (r − g)

Example: Pay 100 per month for 36 months at 8% annually. The tool converts 8% to an effective monthly rate and returns PV (today’s value of the stream) and FV (value at month 36). If you select “Annuity Due,” both results increase because cash arrives earlier.

Tips: If r ≈ g in a growing annuity, PV is very sensitive—try small adjustments to test robustness. For zero rates, the formulas simplify to arithmetic sums.

Break-Even, Margin, and Markup (Pricing)

Use this side of the tool to sanity-check pricing and volume goals.

• Contribution per unit: Price − Variable Cost
• Break-even units: Fixed Costs / (Price − Variable Cost)
• Break-even revenue: Fixed Costs / Contribution Margin Ratio, where CMR = (Price − Variable Cost) / Price
• Margin (%): (Price − Cost) / Price
• Markup (%): (Price − Cost) / Cost

Conversions: from margin m to markup u = m / (1 − m); from markup u to margin m = u / (1 + u).

Example: Price 50, Variable Cost 30, Fixed Costs 10,000 → Contribution = 20. Break-even units = 10,000 / 20 = 500. Margin = 20 / 50 = 40%. If you plan 700 units, expected profit ≈ 700 × 20 − 10,000 = 4,000.

Worked Example: Payments and Pricing Together

Imagine you receive 100 per month for 36 months at an annual discount rate of 8%. The annuity calculator converts the annual rate to an effective monthly rate, then estimates the present value and future value of those payments. If the payments happen at the beginning of each month instead of the end, choose “Annuity Due” because each payment has one extra period to earn interest.

Now suppose you sell a product for 50, with a variable cost of 30 and fixed costs of 10,000. Your contribution per unit is 20, so your break-even point is 500 units. At 700 planned units, expected profit is 4,000 before tax or other adjustments.

Using both sides together can help with business planning. For example, you can estimate the value of future monthly revenue with the annuity calculator, then test whether your pricing and volume assumptions are enough to break even.

When to Use Which

• Annuity PV/FV: valuing payment plans, leases, subscriptions, saving toward goals.
• Break-Even / Margin / Markup: setting prices, testing targets, and estimating how many units you need to sell to cover fixed overheads.

Common Pitfalls

• Margin ≠ Markup: 25% markup is only 20% margin. Use our conversion to avoid mispricing.
• Contribution ≤ 0: If price ≤ variable cost, break-even is impossible—raise price, cut cost, or rethink volume assumptions.
• Period mismatch: Enter an annual rate, then pick the correct period unit so discounting/compounding matches your cash-flow frequency.
• Tax/VAT note (UK/EU): Margin/markup are usually based on net (ex-VAT) prices. Use our VAT calculator if you need to separate VAT from price.

Pro tip: run quick sensitivities—nudge the rate, growth, price, or costs by ±5% to see how PV, FV, and break-even respond. Robust plans change slowly under small tweaks.

Annuity & Break-Even Calculator FAQ

Formula notes and assumptions

This calculator uses standard time-value-of-money formulas for ordinary annuities, annuities due and growing annuities. Annual rates are converted to effective per-period rates based on the selected period unit. Results are estimates and do not include tax, fees, inflation adjustments or investment risk.

• Ordinary annuity: payments are assumed to happen at the end of each period.
• Annuity due: payments are assumed to happen at the beginning of each period.
• Growing annuity: payments are assumed to grow at a constant rate.
• Break-even: fixed costs and variable costs are assumed to stay constant over the selected volume.
• Margin and markup: calculations are based on pre-tax price and cost values unless you enter tax-inclusive numbers.

Last updated: May 2026. Formula logic runs locally in your browser; no calculation inputs are sent to a server.