How to Calculate Annual Payments

Calculate your annual payments to plan ahead on your budget.
Calculate your annual payments to plan ahead on your budget. (Image: Calculating payments image by Christopher Meder from

Annual payments may be needed for insurance plans and banking loans. While some people prefer to pay in smaller increments each month, others decide to put money aside and budget for an entire year. To calculate your annual payments, you need to know how much you have been paying each month or each week.

Annual Payments

If you have a loan that you would like to pay off sooner rather than later, calculate how much you can afford to put aside each year. When you calculate the annual payments, you need to take the total sum of the loan and divide it by the number of years you want to spend paying it off. The more years you choose, the smaller the payments. If you choose to pay it off fast, you need to choose a smaller year amount. Keep in mind that you may be subject to annual interest rates, so add this to the final annual payment. The interest rate depends on your bank and your chosen plan.

Monthly Payments

If you are currently paying off something on a monthly basis, but want to calculate the annual payment sum in order to budget the payments, you need to determine how much you pay each month. Include any monthly interest fees that may apply. This sum must be multiplied by 12, as there are 12 months in a year. This is the amount you need to budget for if you plan on making annual payments instead of monthly.

Bi-Monthly Payments

Bi-monthly payments are made twice a month. If you want to budget the bi-monthly payments, you have an annual payment, add up the two monthly payments into one monthly sum. Include any monthly interest fees that may apply. For example, if one payment is $110 and the second payment is $80, the collected monthly sum is $190. Multiply the sum with 12 to get the annual payment for your budget.

Weekly Payments

If you have payments that are due each week, but you want to budget for the payments on an annual basis, simply multiply the weekly payment with 52, as there are 52 weeks in one year. Include any weekly interest fees that may apply. This can only be done with payments that are the same each month. If the payments differ each week, but has the same sum each month, simply take the collective monthly sum and multiply it by 12 to get the annual payment.

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