Future Value of Annuity Calculator: Ordinary, Due & Growing Annuity
Calculate the future value of periodic payments with our free annuity calculator. Switch between ordinary annuity, annuity due, and growing annuity modes. Instant pie charts, growth bar charts, and a full payment schedule included.
What Is the Future Value of an Annuity?
The future value of an annuity (FVA) is the total value that a series of equal periodic payments will accumulate to at a specific point in the future, given a constant rate of return. Unlike a lump-sum investment, an annuity involves multiple cash flows spread over time, each earning compound interest for a different duration.
Annuities appear everywhere in personal finance:
- Retirement savings — Monthly 401(k) or IRA contributions that grow over 20–40 years.
- Education funds — Regular deposits into a 529 college savings plan.
- Sinking funds — Quarterly payments set aside to replace equipment or repay debt.
- Systematic investment plans (SIPs) — Recurring purchases of mutual fund units or ETFs.
Understanding the future value of an annuity is essential for answering questions like "How much will I have when I retire?" or "How much should I save each month to reach my goal?"
Ordinary Annuity vs Annuity Due
The timing of when payments are made creates two distinct types of annuities, each with a different future value:
| Feature | Ordinary Annuity | Annuity Due |
|---|---|---|
| Payment timing | End of each period | Beginning of each period |
| Common examples | Mortgage payments, bond coupons, loan EMIs | Rent payments, insurance premiums, lease payments |
| Interest earned | Each payment earns interest for (n − k) remaining periods | Each payment earns interest for (n − k + 1) remaining periods |
| FV relationship | FVordinary | FVdue = FVordinary × (1 + r) |
| Higher FV? | Lower | Always higher by one period's interest |
Because each payment in an annuity due is made one period earlier, it has an extra compounding period. This means the annuity due future value is always exactly (1 + r) times the ordinary annuity value — where r is the interest rate per period.
Future Value of Annuity Formula
The mathematical formulas for computing the future value of an annuity are foundational to corporate finance and personal financial planning.
Ordinary Annuity (End of Period)
Annuity Due (Beginning of Period)
Where:
- PMT = Payment per period
- r = Interest rate per compounding period (annual rate ÷ compounding frequency)
- n = Total number of payment periods (years × payments per year)
With an Initial Lump Sum (PV)
If you also start with an initial deposit, the total future value combines both components:
Where T = 0 for ordinary annuity and T = 1 for annuity due.
Growing Annuity: When Payments Increase Over Time
A growing annuity is a series of payments that increase at a constant rate g each period. This models real-world scenarios where contributions rise over time — such as salary-linked retirement contributions that grow with annual raises.
Growing Annuity Future Value Formula
When r = g, the formula simplifies to:
Where:
- PMT = First-period payment
- r = Interest rate per period
- g = Growth rate of payments per period
- n = Total number of periods
FV of Annuity Calculation Examples
Example 1: Monthly Retirement Savings (Ordinary Annuity)
You contribute $500/month to a retirement account earning 7% annually, compounded monthly, for 25 years.
FV = $500 × [((1.005833)300 − 1) / 0.005833] = $405,528.45
Total deposits: $150,000 | Interest earned: $255,528.45
Example 2: Quarterly Insurance Premium (Annuity Due)
You pay $2,000 per quarter at the beginning of each quarter into a fund earning 6% annually, compounded quarterly, for 15 years.
FV = $2,000 × [((1.015)60 − 1) / 0.015] × (1.015) = $197,351.96
Total deposits: $120,000 | Interest earned: $77,351.96
Example 3: Growing Annual Contributions
You save $6,000/year with a 4% annual raise in contributions, at 8% return for 30 years.
Compared to a fixed $6,000/year annuity FV of $679,699 — the 4% annual growth adds $351,723 in extra value.
FVIFA: Future Value Interest Factor of Annuity
The FVIFA (Future Value Interest Factor of Annuity) is a convenient multiplier that simplifies annuity future value calculations. It represents the future value of a $1 annuity — so to find any annuity's future value, simply multiply the payment by the FVIFA factor.
FVIFA tables were historically used by bankers and accountants before calculators became ubiquitous. Today they remain an important teaching tool in finance courses and CFA/CPA exam preparation.
Sample FVIFA Values
| Years (n) | r = 4% | r = 6% | r = 8% | r = 10% |
|---|---|---|---|---|
| 5 | 5.4163 | 5.6371 | 5.8666 | 6.1051 |
| 10 | 12.0061 | 13.1808 | 14.4866 | 15.9374 |
| 15 | 20.0236 | 23.2760 | 27.1521 | 31.7725 |
| 20 | 29.7781 | 36.7856 | 45.7620 | 57.2750 |
| 30 | 56.0849 | 79.0582 | 113.2832 | 164.4940 |
Reading the table: at 8% for 20 years, FVIFA = 45.762. If your annual payment is $5,000, the annuity future value = $5,000 × 45.762 = $228,810.
Frequently Asked Questions
-
The future value of an annuity is the total accumulated value of a series of equal periodic payments at a specific future date, assuming each payment earns compound interest. It tells you how much your regular savings or investment contributions will be worth at the end of the investment horizon.
-
An ordinary annuity makes payments at the end of each period — examples include mortgage payments, bond coupons, and most loan repayments. An annuity due makes payments at the beginning of each period — examples include rent, insurance premiums, and lease payments. The annuity due always produces a higher future value because each payment has an extra period to earn interest.
-
A growing annuity is a series of payments that increase at a constant percentage rate each period. Use it when your contributions are expected to grow over time — for example, annual retirement contributions that increase with salary raises (typically 2–5% per year). The growth factor can significantly boost the final future value compared to a fixed-payment annuity.
-
More frequent compounding means interest is calculated and added to the balance more often, which increases the effective rate and the final future value. For example, $500/month at 6% compounded monthly yields more than the same payments at 6% compounded annually. The difference grows larger over longer time periods.
-
FVIFA (Future Value Interest Factor of Annuity) is a multiplier equal to ((1+r)n − 1) / r. To find the future value of an annuity, multiply the periodic payment by the FVIFA factor: FV = PMT × FVIFA. It is commonly provided in lookup tables in finance textbooks and is useful for quick mental calculations.
-
Yes. Enter a starting amount in the "Starting Amount (PV)" field. The calculator will compound that lump sum alongside your periodic payments. The total FV equals the compounded lump sum plus the future value of the annuity stream.
-
Use the
=FV(rate, nper, pmt, [pv], [type])function. For an ordinary annuity paying $500/month at 7% for 20 years:=FV(0.07/12, 240, -500, 0, 0). For an annuity due, change the last parameter to 1:=FV(0.07/12, 240, -500, 0, 1). Note: Excel requires payments entered as negative numbers.