Future Value Calculator For Annuity

Guidelines to use future value calculator for annuity

Number of Periods:

• No of periods are generally no of years in future that you expect your investment to be matured.
• It can either be a whole number or a decimal number in the case of partial period such as months
  Example: 2 years and 6 months can be entered as 2.5 years

Interest rate per period:

• Annual nominal interest rate at which the present value of lump sum increases.
• Enter rate in terms of percentage. It should be greater than zero.

Compounding per period:

• The frequency of compounding that occurs in a period.
• It can be annually, half-yearly, monthly, quarterly or daily.

Payment amount:

• Payment amount is the amount of money you are expecting to receive per period.
• It should be greater than zero.

Payment frequency:

• Payment frequency is the frequency at which you get paid per period.
• It can be annually, half-yearly, monthly, quarterly or daily.

Payment at period:

• Payment at period is when the payment is made in a period.
• It can either be 'end of period' if the payment is made at the end of the period (Ordinary annuity, in arrears) or 'beginning of period' if the payment is made at the beginning of the period (Annuity due, in advance).

Result:

• The calculated future value of annuity.

Whether you are placing an annuity within a retirement plan or planning to have it as structured settlements or lump sum, it is important to do proper calculations. Based on a given annually or monthly compound interest rate inferring the same dollar amount is invested with growing each year, the future value of an annuity is calculated.

Future Value of an Annuity is the future value of a stream of equal payments, where it takes place at the last part of each time period. This calculator will solve problems in which you deposit equal amounts into an account in order to withdraw the money in the future. The annuity payment formula calculates the cash flows of an annuity; however the number of periods, the rate per period, and the time at which these payments are made (whether at the beginning or end of each payment period), payment amount are all variables you need to account for in your calculations.

Seeing that there are two types in an annuity, the ordinary annuity calculator in which payments occur at the end of each period is used to calculate the future value for the given amount of annuity for each year and this certainly depends on the interest rate and a number of periods. As with annuity due, different formulas for future value calculation is done, so make it simple by deciding it initially. In order to have a very clear idea on the Future value annuity, you can refer to sample problems that are available online.