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Future Value of Annuity Calculator

Future Value of Annuity Calculator

Get future values of annuity for upcoming dates with the help of this free online future value of annuity calculator.

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Payment Amount

$

Interest rate

%

Annuity term

 

Compounding frequency

Payment frequency

Type of Annuity

Growth Rate (Optional)

%
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Table of Content

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The future value of annuity calculator assists to provide the comprehensive values of annuity in the future dates. The future value of the annuity is computed at a regular interval which can be either monthly or yearly.

We can calculate the annuity payments, interest rates, and time periods desired. For understanding the terms it is essential to understand the concept of the annuity.

What is an annuity?

An annuity is a series of payments made at regular intervals of time periods. There are different examples of annuities like savings accounts, monthly mortgage payments, and pension payments. The future value of an annuity calculator is adjustable for finding the annuity for any time period regardless of whether we are calculating on a daily, monthly, or yearly basis.

The future value of an annuity can be made on a weekly, monthly, quarterly, and yearly basis. The future value of annuity calculator is a comprehensive measurement of annuity in the future dates. The interval can be based on the mutual understanding between the lending company and the customers.

Types of the annuities:

There are two types of annuities and we are going to discuss them one by one:

  • Ordinary annuity
  • Annuity due

Ordinary Annuity:

“When you make the payments at the end of each time interval then we call it the ordinary annuity”.
An ordinary annuity is a series of regular payments made at the end of each period, such as monthly or quarterly. We are using the ordinary annuity formula calculator for this type of annuity. The future value of annuity formula for ordinary annuity is as follows:
FV of Ordinary Annuity = C x [(1+i)^n – 1 / i)
Where:
C= Cash Flow Per Period
i= interest rate
n=number of payments
Example:
Now consider an example where cash flow per period is $1000, the interest rate is 5% and a number of periods for the ordinary annuity is 5 years time:
Then we get the following data:
C=$1000
i= 5%
n=5 years
Put the values of the ordinary annuity in the future value of annuity calculator.
FV of Ordinary Annuity = C x [(1+i)^n – 1 / i)
= $1000 x [(1+5%)^5 – 1 / 5%)
= $1000 x [(1+0.05)^5 – 1 / 0.05)
= $1000 x 5.53
= $ 5,525.64
Ordinary Annuity

The value calculated by the ordinary annuity calculator is $ 5,525.64 after 5 years and an interest rate of 5 %.

Annuity Due:

The annuity due is paid at the beginning rather than the end of each time period.
The future value of annuity formula for annuity due is as follows, we can find the annuity due by putting the values in the future value of annuity calculator:
FV of an Annuity Due = C x [(1+i)^n – 1 / i) x (1 + i)

Example:
Let us again suppose the example mentioned for an annuity due, We have cash flow per period is $ 1000, and we want to find the annuity due of the payments. The interest rate is 5% and the number of periods for the ordinary annuity is 5 years time:

Then we get the following data:
C=$1000
i= 5%
n=5 years
Inserting the values in the Future value of annuity formula for annuity due.
FV of an Annuity Due = C x [(1+i)^n – 1 / i) x (1 + i)
= $1000 x [(1+5%)^5 – 1 / 5%)x (1 + i)
= $1000 x [(1+0.05)^5 – 1 / 0.05)x (1 + 0.05)
= $1000 x 5.53x 1.05
= $ 5801.91
Annuity due

The value calculated by the annuity due calculator is $ 5801. 92 after 5 years and an interest rate of 5 %.

Terms involved in an annuity:

For understanding the future value of annuity we need to understand the preceding terms:

Period(n):

The time period between two intervals of an installment is called the future value of the annuity period. It can be yearly, monthly, or quarterly. It is denoted by the “n”.

Interest rate(i):

It is the annual rate of interest and it can be changed after a year. We can find it by dividing the interest rate by 100 as it is described as 5% or 6% etc. The future value of the annuity calculator automatically converts the values of “i” by dividing it by 100. We only have to add the values of “i” in the designated field.

Payment amount (C):

The amount paid for or the principal amount around which we are doing the compounding. It is also described as (PMT). Therefore, we are using PMT in place of “C”. The PMT stands for the Principal amount of future value of the annuity. We are using the “Cash value or “C” in the annuity payment calculator.

Growth Rate (G):

It is the growth rate of the annuity per period in the form of a percentage, which means we need to enter the growth rate as it is added to the interest rate after the time prescribed in the formulas. When you are using the future value of the annuity calculator, it is optional to prescribe the Growth Rate (G) as the interest rate remaining the same for a certain period

Payment frequency(q):

How often you are going to pay during each period of time, for yearly time periods we need to enter a value in the future value of annuity calculator =1, quarterly=4, monthly=12,daily=365, etc.

Payment types:

The payment types can be changed according to the annuity types, for the ordinary annuity, we are at the end of the installment period. The ordinary annuity formula misses the (1+i) as we are paying at the end of the installment period. For annuity due, we are paying the installment at the start of the installation time. We do add the term (1+i) as we are paying at the start of the installment period. For annuity due measurements we do require a future value annuity due calculator.

Future values (FV):

The future value or FV is the value of the present values of cash flows. We insert the values in the future value of the annuity calculator to realize the future value of the present amount. The future value of an annuity is calculated against the number of time intervals.

The Future Value of the Annuity table:

We are presenting a table by inserting the values of $1 per period (n) changes from 1 to 50 and “i” changes from 1% to 5%. We have inserted the values in the future value of the annuity calculator and rechecked all the values. The value starts from the time period “1” to “50” and the interest rate starts from 1% to 5%.

Periods 1% 2% 3% 4% 5%
1 1.0000 1.0000 1.0000 1.0000 1.0000
2 2.0100 2.0200 2.0300 2.0400 2.0500
3 3.0301 3.0604 3.0909 3.1216 3.1525
4 4.0604 4.1216 4.1836 4.2465 4.3101
5 5.1010 5.2040 5.3091 5.4163 5.5256
6 6.1520 6.3081 6.4684 6.6330 6.8019
7 7.2135 7.4343 7.6625 7.8983 8.1420
8 8.2857 8.5830 8.8923 9.2142 9.5491
9 9.3685 9.7546 10.1591 10.5828 11.0266
10 10.4622 10.9497 11.4639 12.0061 12.5779
11 11.5668 12.1687 12.8078 13.4864 14.2068
12 12.6825 13.4121 14.1920 15.0258 15.9171
13 13.8093 14.6803 15.6178 16.6268 17.7130
14 14.9474 15.9739 17.0863 18.2919 19.5986
15 16.0969 17.2934 18.5989 20.0236 21.5786
16 17.2579 18.6393 20.1569 21.8245 23.6575
17 18.4304 20.0121 21.7616 23.6975 25.8404
18 19.6147 21.4123 23.4144 25.6454 28.1324
19 20.8109 22.8406 25.1169 27.6712 30.5390
20 22.0190 24.2974 26.8704 29.7781 33.0660
21 23.2392 25.7833 28.6765 31.9692 35.7193
22 24.4716 27.2990 30.5368 34.2480 38.5052
23 25.7163 28.8450 32.4529 36.6179 41.4305
24 26.9735 30.4219 34.4265 39.0826 44.5020
25 28.2432 32.0303 36.4593 41.6459 47.7271
26 29.5256 33.6709 38.5530 44.3117 51.1135
27 30.8209 35.3443 40.7096 47.0842 54.6691
28 32.1291 37.0512 42.9309 49.9676 58.4026
29 33.4504 38.7922 45.2189 52.9663 62.3227
30 34.7849 40.5681 47.5754 56.0849 66.4388
31 36.1327 42.3794 50.0027 59.3283 70.7608
32 37.4941 44.2270 52.5028 62.7015 75.2988
33 38.8690 46.1116 55.0778 66.2095 80.0638
34 40.2577 48.0338 57.7302 69.8579 85.0670
35 41.6603 49.9945 60.4621 73.6522 90.3203
36 43.0769 51.9944 63.2759 77.5983 95.8363
37 44.5076 54.0343 66.1742 81.7022 101.6281
38 45.9527 56.1149 69.1594 85.9703 107.7095
39 47.4123 58.2372 72.2342 90.4091 114.0950
40 48.8864 60.4020 75.4013 95.0255 120.7998
41 50.3752 62.6100 78.6633 99.8265 127.8398
42 51.8790 64.8622 82.0232 104.8196 135.2318
43 53.3978 67.1595 85.4839 110.0124 142.9933
44 54.9318 69.5027 89.0484 115.4129 151.1430
45 56.4811 71.8927 92.7199 121.0294 159.7002
46 58.0459 74.3306 96.5015 126.8706 168.6852
47 59.6263 76.8172 100.3965 132.9454 178.1194
48 61.2226 79.3535 104.4084 139.2632 188.0254
49 62.8348 81.9406 108.5406 145.8337 198.4267
50 64.4632 84.5794 112.7969 152.6671 209.3480

All these values are for the ordinary annuity and it is best to put the values in the future value of ordinary annuity calculator. Try to calculate for other values and time “i” and “n”.

Working on future value of annuity calculator:

The working pattern of the annuity calculator math is described as follows:
Input:

  • Enter the values in the designated field.
  • Enter the principal amount, the interest rate in the field
  • Enter the number of periods and annuity type

Output:
When we are utilizing the future value of an annuity calculator, we are going to find the detailed output of annuity.

  • The future values of annuity displayed
  • Number of interest periods
  • The interest rate was applied.

FAQs:

What is an ordinary annuity example in common life?

An example of the ordinary annuity is the Home mortgage, for which the homeowner is bound for the payments at the end of each month according to the decided rate of interest. The future value of ordinary annuity calculator is used to implement the ordinary annuity.

What is an annuity due in common life?

The monthly bills such as rent, car payments, and cell phone payments are done at the start of the month. The insurance amount payment is a typical example of the annuity due and we need to use the annuity due calculator to find the monthly installment.

Do annuities count as the income of a person?

The annuity is fully taxable income, when you receive an annuity you are actually purchasing an asset and it is a taxable income.

What kind of annuities are best for the seniors?

Immediate annuities for senior citizens tend to be the best annuities for seniors because they begin paying out within 12 months of purchase.

Conclusion:

Annuities are a reliable source of income over a period of time and especially for the people after retirement. It can be insurance products and equity investments. The annuity helps to balance the financial benefits for a person and also for companies. The future value of an annuity can be a source of income for the deceased person. The future value of the annuity calculator is efficient in finding the future value of the annuity.

References:

From the source of investopedia.com: Future value of annuity, Examples of annuity 

From the source of Wikipedia:Time value of money, Present value, future value

From the source of smallbusiness.chron.com:Annuity Basics, Future Value of Annuity Formula