Quick answer
- What it calculates: the future value of equal regular payments with compound growth.
- Payment timing: compare ordinary annuity payments at the end of each period with annuity due payments at the beginning.
- Results: future value, total contributions, interest earned, number of payments, and effective periodic rate.
Use this future value of annuity calculator to estimate how much regular deposits could grow to over time. It is useful for savings plans, retirement contributions, education funds, and recurring investments where the same payment is added each period.
Enter the payment amount, annual interest rate, number of years, payment frequency, and whether payments are made at the beginning or end of each period. The calculator shows the future value, total contributions, interest earned, number of payments, and effective periodic rate.
Inputs used by the calculator
| Input | Meaning | Example |
|---|
| Periodic payment | The equal amount deposited each period. | 1,000 per year |
| Annual interest rate | The expected annual growth rate before conversion to the payment period. | 5% |
| Number of years | How long the payment stream compounds. | 10 years |
| Payment timing | Whether payments happen at the end or beginning of each period. | Ordinary annuity or annuity due |
What is the Future Value of an Annuity?
Future value of an annuity is the amount a stream of equal payments can grow to by a future date. Instead of valuing one starting deposit, it shows the accumulated result of repeated contributions plus compound growth over time.
Future Value of Annuity Formula
For an ordinary annuity, the standard formula is FV = PMT × [((1 + i)^n - 1) / i]. For an annuity due, multiply that result by (1 + i) because each payment gets one extra period to earn interest.
Ordinary Annuity vs Annuity Due
An ordinary annuity assumes payments are made at the end of each period. An annuity due assumes payments are made at the beginning of each period, which gives each contribution more time to compound and leads to a higher future value.
Example Calculation
Suppose the periodic payment is 1,000, the annual interest rate is 5%, the term is 10 years, the payment frequency is annually, and the annuity type is ordinary annuity.
FV = 1,000 × [((1 + 0.05)^10 - 1) / 0.05]
FV ≈ 12,577.89
This means that investing 1,000 per year for 10 years grows to about 12,577.89 if the annual interest rate is 5%.
If payments are made at the beginning of each period, the annuity due value is higher because each payment has one extra period to earn interest.
When to Use Future Value of Annuity
Use future value of annuity when you want to estimate the end value of recurring savings, retirement contributions, education funding, or any regular investment plan. It is useful when you care about how repeated deposits compound into a future balance, not just how one lump sum grows.
If you need a broader tool with more time-value options, use the advanced present and future value calculator.
Future Value of Annuity Calculator FAQ
What is the future value of an annuity?
It is the future value of a series of equal payments made over time. The calculation combines all contributions and the interest those contributions earn until the chosen end date.
How do you calculate the future value of an annuity?
You use the periodic payment, interest rate, number of payments, and payment timing. The calculator converts the annual rate into a periodic rate and then applies the ordinary annuity or annuity due formula.
What is the future value of annuity formula?
For an ordinary annuity, the formula is FV = PMT x [((1 + i)^n - 1) / i]. For an annuity due, multiply that result by (1 + i) because each payment compounds for one extra period.
What is the difference between an ordinary annuity and an annuity due?
An ordinary annuity assumes payments happen at the end of each period. An annuity due assumes payments happen at the beginning, so each contribution starts earning interest sooner.
Why is an annuity due worth more than an ordinary annuity?
Each annuity-due payment gets one additional compounding period compared with an ordinary annuity. Because all payments start earlier, the future accumulated value ends up higher.
What interest rate should I use?
Use a rate that matches your expected return or planning assumption for the investment. The result depends heavily on that rate and the compounding frequency.
What is the difference between future value and future value of annuity?
Future value usually refers to one lump sum growing over time. Future value of annuity applies the same growth idea to a whole series of equal periodic payments instead of one starting amount.
When should I use a future value of annuity calculator?
Use it when you want to estimate how regular deposits can build over time, such as retirement contributions, monthly savings, education funds, or annual investments. It is especially useful for long-term goal planning funded by repeated payments.
