This future value of an annuity calculator works out the future value (FV) of a regular sum of money (Pmt) received at the end of each of n periods, using a discount rate i.
Future Value of an Annuity Calculator Formula
The calculator uses the future value of an annuity formula as shown below:
FV = Pmt x ( (1 + i)n - 1 ) / i
Calculator Instructions
The Excel future value of an annuity calculator, available for download below, is used to compute the future value by entering details relating to the regular payment, discount rate and the number of periods. The calculator is used as follows:
Step 1
Firstly enter the regular payment amount (Pmt). The regular payment is the amount received at the end of each period for n periods. It is important to realize that the amount must be the same for each period.
Step 2
Secondly 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 is for a period. If the period is a year, then the rate to use is the yearly rate.
Step 3
Following this 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 4
Finally the future value calculator works out the future value (FV). As can be seen the answer is the value at the end of period n of an a regular sum of money received at the end of each of the n periods, at a discount rate of i. It is the future value of an annuity, sometimes referred to as the future value of an ordinary annuity.
Annuity Calculator Download
The future value of an annuity calculator spreadsheet is available for download in Excel format by following the link below.
Additionally the future value of an annuity calculator is only one type of tvm calculator used in time value of money calculations, discover another at the links below.
Users use this free annuity calculator at their own risk. Furthermore we make no warranty or representation as to its accuracy. We are covered by the terms of our legal disclaimer, which you are deemed to have read. This is an example of a calculator that you might use when considering how to calculate the value of an annuity. It is purely illustrative of a of an annuity calculator. This is not intended to reflect general standards or targets for any particular business, company or sector. If you do spot a mistake in this ordinary annuity calculator, please let us know and we will try to fix it.
About the Author
Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.