Future Value of an Annuity Calculator
This calculator helps you determine the future value of a series of annuity payments, useful for financial planning and investments.
Annuity Calculator
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Future Value
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Data Source and Methodology
All calculations are based on standard financial formulas for annuities. Consult financial literature for more detailed information.
The Formula Explained
The future value of an annuity is calculated using the formula:
\[ FV = P \times \left( \frac{(1 + r)^n - 1}{r} \right) \]
Glossary of Terms
- Payment Amount (P): The amount of each annuity payment.
- Interest Rate (r): The interest rate per period.
- Number of Periods (n): The total number of payment periods.
- Future Value (FV): The total value of the annuity at the end of the investment period.
How It Works: A Step-by-Step Example
Consider an annuity with a payment of $100, an interest rate of 5%, and 10 periods. The future value would be calculated as follows:
Using the formula, plug in the values to find the future value.
Frequently Asked Questions (FAQ)
What is the future value of an annuity?
The future value of an annuity is the total value of a series of payments at a specified date in the future.
How do I calculate the future value of an annuity?
You can use the formula \( FV = P \times \left( \frac{(1 + r)^n - 1}{r} \right) \) to calculate it.