what is the formula for the present value of an annuity due 
with an annuity due in which payments are made at the beginning of each period the formula is slightly different than that of an ordinary annuity to find the value of an annuity due simply multiply the above formula by a factor of 1 r 6p pmt 1 1 1 r n r 1 r begin aligned text p text pmt times frac 1 big frac 1 1 r n big r times 1 r end aligned p pmt r1 1 r n1 1 r the bottom linethe present value pv of an annuity is the current value of future payments from an annuity given a specified rate of return or discount rate it is calculated using a formula that takes into account the time value of money and the discount rate which is an assumed rate of return or interest rate over the same duration as the payments the present value of an annuity can be used to determine whether it is more beneficial to receive a lump sum payment or an annuity spread out over a number of years 