# Future Value Annuity Formula

## Formula and Use

The future value annuity formula shows the value at the end of period n of a series of regular payments. The payments are made at the end of each period for n periods, and a discount rate i is applied. The formula compounds the value of each payment forward to its value at the end of period n (future value).

## Excel Function

The Excel FV function can be used instead of the future value annuity formula, and has the syntax shown below.

`FV = FV(i, n, pmt, PV, type)`

*The PV and type arguments are not used when using the Excel future value of an annuity function.

## Future Value Annuity Formula Example

If a payment of 5,000 is received at the end of each period for 10 periods, and the discount rate is 4%, then the value of the payments at the end of period 10 is given by the future value annuity formula as follows:

```FV = Pmt x ( (1 + i)n - 1 ) / i
FV = 5,000 x ( (1 + 4%)10 - 1 ) / 4%
FV = 60,030.54```

The same answer can be obtained using the Excel PV function as follows:

```FV = FV(i, n, Pmt)
FV = FV(4%,10,-5000)
FV = 60,030.54```

The future value of annuity formula is one of many annuity formulas used in time value of money calculations, discover another at the link below.