Future Value Of Annuity Calculator
Future Value Of annuity is the amount paid in or out for each period. The annual nominal interest rate Expressed as a percentage. Annuity term constitutes lifespan of the annuity.The interest is compounded number of time.
Let us consider,
- Payment amount (PMT) is the amount paid in or out (cash flow) for each period.
- Interest rate (r) is the annual nominal interest rate expressed as a percentage.
- Annuity term constitutes the lifespan of the annuity.
- Compounding frequency (m) refers to the number of times the interest is compounded.
- Payment frequency (q) indicates how often the payments will materialize.
- Type of annuity (T) signifies the timing of the payment in each payment period (ordinary annuity: end of each payment period; annuity due: the beginning of each payment period).
- Future value of annuity (FVA) the future value of any present value cash flows (payments).
- Growth rate of annuity (g) is the percentage increase of an annuity in the case of a growing annuity.
- Number of periods (t) shows the annuity term in years.
- Equivalent interest rate and Periodic equivalent interest rate are the interest rates computed when the payments and compounding occur at a different frequency (cannot be set manually).
annuity formula us,
- Ordinary Annuity:FVA = PMT / i * ((1 + i) ^ n – 1)
- Annuity Due:FVA = PMT / i * ((1 + i) ^ n – 1) * (1 + i)
let us consider,
n = m * t where n is the total number of compounding intervals
i = r / m where i is the periodic interest rate (rate over the compounding intervals)
- Future Value of a Growing Annuity (g ≠ i):FVA = PMT / (i – g) * ((1 + i) ^ n – (1 + g) ^ n)
- Future Value of a Growing Annuity (g = i):FVA = PMT * n * (1 + i) ^ (n – 1)
- Future Value of an Annuity with Continuous Compounding (m → ∞)
FVA = PMT / (eʳ – 1) * (eʳᵗ – 1)