Future Value of Annuity

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Future Value of Ordinary Annuity formula (FVOA) is:

 Future Value of Ordinary Annuity formula

Future Value of Annuity Due formula (FVAD) is:

 Future Value of Annuity Due formula

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Definitions and terms used in Future Value of Annuity Calculator

Payment Amount
The amount expected to receive or pay each time period.
Interest Rate Per Period
The rate at which the interest for the use of money is charged or paid. Usually, the interest rate is expressed as a percentage and noted on annual basis.
Number of Time Periods
The number of time the interest is compounded (year, month, quarter etc.) and must have the same time frame as ‘Interest Rate Per Period’.
Compound interest
The interest that increases exponentially over time periods. The interest earning interest.
Annuity
Structured schedule of payments of the same amount at regular time intervals.
Ordinary Annuity
The annuity payments are made at the end of each period.
Annuity Due
The annuity payments are made at the beginning of each period.

Future Value of Annuity Examples

Example 1:

You invest 10,000.00 at the beginning of each year and earn 3.25% annual interest rate compounded annually. How much the investment is worth after 25 years?

Payment (Annuity) = 10,000

Interest Rate Per Period = 3.25%

Number of Time Periods = 25

Annuity Type: Due (Beginning)

AnswerFuture Value = 389,045.31

If you were to continually invest 10,000.00 at the beginning of each year, at a rate of 3.25 % per year, you would receive 389,045.31 after 25 years, which is worth 174,883.43 today.

 

Example 2:

You invest 10,000.00 at the end of each year and earn 3.25% annual interest rate compounded annually. How much the investment is worth after 25 years?

Payment (Annuity) = 10,000

Interest Rate Per Period = 3.25%

Number of Time Periods = 25

Annuity Type: Ordinary (End)

AnswerFuture Value = 376,799.33

If you were to continually invest 10,000.00 at the end of each year, at a rate of 3.25 % per year, you would receive 376,799.33 after 25 years, which is worth 169,378.63 today.

 

Example 3:

You invest 2,500.00 at the beginning of each quarter and earn 3.24% annual interest rate compounded quarterly. How much the investment is worth after 25 years?

Payment (Annuity) = 2,500

Interest Rate Per Period = 3.24% / 4 = 0.81%

Number of Time Periods = 25 * 4 = 100

Annuity Type: Due (Beginning)

AnswerFuture Value = 385,998.15

If you were to continually invest 2,500.00 at the beginning of each quarter, at a rate of 3.25 % per year compounded quarterly, you would receive 385,998.15 after 25 years, which is worth 172,275.59 today.