# Future Value of a Growing Annuity Calculator

## What does it do?

This future value of a growing annuity calculator works out the future value (FV) of a regular sum of money (Pmt) which is growing or declining at a constant rate (g) each period. The payments are made at the end of each period for n periods, and a discount rate i is applied.

## Formula

The calculator uses the future value of a growing annuity formula as shown below:

`FV = Pmt x ( (1 + i)n - (1 + g)n ) / (i - g)`

## Instructions

The Excel future value of a growing annuity calculator, available for download below, is used to compute the future value by entering details relating to the regular payment, growth rate, discount rate and the number of periods. The calculator is used as follows: ### Step 1

Enter the regular payment amount (Pmt). The regular payment is the amount received at the end of each period for n periods. The amount must be the same for each period.

### Step 2

Enter the growth rate (g). The growth rate is the rate at which the original payment (Pmt) is growing each period. The rate should be for a period, so for example, if the period is a year, then the rate should be the yearly growth rate.

### Step 3

Enter the discount rate (i). The discount rate is the rate used to discount each payment amount back from the end of the period in which is was made, to the beginning of period 1 (today). The rate should be for a period, so for example, if the period is a year, then the rate should be the yearly rate.

### Step 4

Enter the number of periods (n). The number of periods is entered. A period can be any term (month, year etc), but must be consistent with the discount rate provided (see step 2).

### Step 5

The future value of a growing annuity calculator works out the future value (FV). The answer is the value at the end of period n of an a regular sum of money growing at a constant rate (g) each period, received at the end of each of the n periods, and discounted at a rate of i. It is the future value of a growing annuity.