## Present Value of Growing Annuity

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Present Value of Growing Ordinary Annuity formula (PVGOA) is:

a) Interest Rate ≠ Growing Rate

 $Present Value of Growing Ordinary Annuity formula$$Present Value of Growing Ordinary Annuity formula$

b) Interest Rate = Growing Rate

 $Present Value of Growing Ordinary Annuity formula$$Present Value of Growing Ordinary Annuity formula$

Present Value of Growing Annuity Due formula (PVGAD) is:

 $Present Value of Growing Annuity Due formula$$Present Value of Growing Annuity Due formula$

### Definitions and terms used in Present Value of Growing Annuity Calculator

Payment Amount
The amount expected to receive or pay each time period.
Payment Growing Rate Per Period
The rate at which the payment changes each time period, expressed as a percentage.
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.

### Present Value of Growing Annuity Examples

Example 1:

You invest 5,000.00 for 25 years at the beginning of each year. Every year you increase (adjust) the invested amount by 3%. How much the investment is worth today at 5.25% annual interest rate compounded annually?

Payment Amount = 5,000

Payment Growing Rate Per Period = 3.00%

Interest Rate Per Period = 5.25%

Number of Time Periods = 25

Annuity Type: Due (Beginning)

If you were to continually invest, starting with 5,000.00 and increasing it by 3 % every time period (month, quarter, year, etc.) at the beginning of time period, at a rate of 5.25 % per time period, you would receive 350,836.00 after 25 time periods, which is worth 97,622.86 today.

Example 2:

You invest 5,000.00 for 25 years at the end of each year. Every year you increase (adjust) the invested amount by 3%. How much the investment is worth today at 5.25% annual interest rate compounded annually?

Payment Amount = 5,000

Payment Growing Rate Per Period = 3.00%

Interest Rate Per Period = 5.25%

Number of Time Periods = 25

Annuity Type: Ordinary (End)