Home
Back
Annuity Future Value Formula:
| From: | To: |
Annuity future value calculates the total value of a series of equal payments at a specified future date, considering compound interest. It's commonly used for retirement planning, savings goals, and investment analysis.
The calculator uses the annuity future value formula:
Where:
Explanation: This formula calculates the compounded future value of a series of equal payments made at regular intervals, assuming the interest rate remains constant.
Details: Annuity calculations are essential for financial planning, retirement savings analysis, loan amortization, and investment decision-making. They help individuals and businesses plan for future financial needs.
Tips: Enter the periodic payment amount in dollars, interest rate as a decimal (e.g., 0.05 for 5%), and the total number of payment periods. All values must be positive numbers.
Q1: What is the difference between ordinary annuity and annuity due?
A: Ordinary annuity payments occur at the end of each period, while annuity due payments occur at the beginning. This calculator assumes ordinary annuity.
Q2: How do I convert annual rate to periodic rate?
A: Divide the annual rate by the number of periods per year. For monthly payments with 6% annual rate, use 0.06/12 = 0.005.
Q3: Can this calculator handle variable payments?
A: No, this calculator assumes constant periodic payments. For variable payments, each period must be calculated separately.
Q4: What if the interest rate changes over time?
A: This calculator assumes a constant interest rate. For changing rates, the calculation must be done in segments for each rate period.
Q5: How accurate is this calculation for real-world scenarios?
A: It provides a theoretical maximum assuming perfect conditions. Real-world factors like fees, taxes, and compounding frequency may affect actual results.