Future Value of Annuity Calculator, FVA Calculator

These annuities will give you an income right away, although they require a larger initial payment and might not keep pace with inflation. There are many different types of annuities, but all annuities offer a greater, time-value-adjusted future payout in exchange for “paying in” early, whether partially or all at once. These payouts are made on an annual basis, which makes them excellent planning tools when you are considering future unknowns, such as the length of your retirement. Calculate the future value of an annuity by entering the payment, term, rate, and type of annuity in the calculator below.

All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. In some cases, you may want to determine the interest rate that must be earned on an annuity in order to accumulate a predetermined amount. With the general formula below, we can solve a variety of problems involving the future value of an annuity. It earns interest for only 3 periods because it was deposited at the end of the first period and earns interest until the end of the fourth. We specialize in helping you compare rates and terms for various types of annuities from all major companies.

Examples of Annuity Due

You might also be interested in learning how to calculate the present value of an annuity. If you want to figure out what the annuity might be worth over the course of ten years, use “10” in place of “n” in the formula above. From your perspective, an annuity due would be better since you could earn interest on the first year’s payment for the entire year. Enter the deposit/payment amount that corresponds to the selected annuity type. Note that my expertise is in creating online calculators, not necessarily in all of the subject areas they cover.

The present value of an annuity is the total value of all of future annuity payments. A key factor in determining the present value of an annuity is the discount rate. The future value of an annuity is the value of a group of recurring payments at a certain date in the future, assuming a particular rate of return, or discount rate.

Annuity Future Value Formula

An annuity’s value is the sum of money you’ll need to invest in the present to provide income payments down the road. When working with multiple time segments, it is important that you always start your computations on the side opposite the unknown variable. For future value calculations, this future value of an ordinary annuity means you start on the left-hand side of your timeline; for present value calculations, start on the right-hand side. You can also use the FV formula to calculate other annuities, such as a loan, where you know your fixed payments, the interest rate charged, and the number of payments.

• Note that my expertise is in creating online calculators, not necessarily in all of the subject areas they cover.
• The future value of any annuity equals the sum of all the future values for all of the annuity payments when they are moved to the end of the last payment interval.
• If you would like to save the current entries to the secure online database, tap or click on the Data tab, select “New Data Record”, give the data record a name, then tap or click the Save button.
• After 11 years, the client has $66,637.03 in the account and has earned $22,637.03 in interest.
• This formula can be used to solve any number of different problems concerning annuities.
• For future value calculations, this means you start on the left-hand side of your timeline; for present value calculations, start on the right-hand side.
• The calculation factors in the amount of interest the annuity pays, the amount of your monthly payment, and the number of periods, usually months, that you expect to pay into the annuity.