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The future value of an annuity is the value of a group of recurring payments at a certain date in the future, assuming a particular rate of return, or a discount rate. The higher the...
The future value of an annuity is the total value of payments at a future point in time. The present value is the amount of money required now to produce those future payments.
Calculate the future value of an annuity due, ordinary annuity and growing annuities with optional compounding and payment frequency. Annuity formulas and derivations for future value based on FV = (PMT/i) [ (1+i)^n - 1] (1+iT) including continuous compounding.
To calculate the future value of an annuity: Define the periodic payment you will do (P), the return rate per period (r), and the number of periods you are going to contribute (n). Calculate: (1 + r)ⁿ minus one and divide by r. Multiply the result by P, and you will have the future value of an annuity.
You can use an online calculator to figure both the present and future value of an annuity, so long as you know the interest rate, payment amount and duration.
Formula. Future value of an annuity = Factor x Annuity payment. As long as we know two of the three variables, we can solve for the third. Thus, we can solve for the future value of the annuity, the annuity payment, the interest rate, or the number of periods.
The key components of the formula are: FV = Future value of annuity; PMT = Amount of each annuity payout; r = Interest rate, also known as discount rate (%) n = Number of payment periods