# FUTURE VALUE OF ANNUITY CALCULATOR

Enter the Periodic payment amount, annual interest rate, and Number of years in the input box. Don't forget to select the compounding frequency and the type of annuity.

Payment frequency annually Semi-annually Quarterly Monthly weekly

### What is annuity?

An annuity is a series of equal payments/receipts that are made or received at regular intervals.

Examples of annuity are savings accounts, pension payment, etc.

### How many types of annuity do we have?

There are three types of annuity, namely: Annuity due, ordinary annuity and perpetuity.

An ordinary annuity is a series of equal payments/receipts made or received at the end of each periods such as quarterly, monthly or annually.

An annuity due is a series of equal payments/receipts made or received at the start of the each periods such as quarterly monthly or annually.

A perpetuity is an annuity which will last perpetually. That is, the annuity continues forever.

### What is the future value of an annuity?

This is the amount that a stream of equal  payment will be worth some time in the future given a particular interest rate.

The future value of an annuity is the sum of the all periodic payments and the interest rate earned.

A perpetuity do not have future value because it lasts for an infinite number of years.

### How do you calculate the future value of an ordinary annuity?

The future value of an ordinary annuity can be defined as the future value of a stream of equal payments or received made at the end of the period.

It is calculated as follows:

$$FV=C\left[\frac{\left(1+\frac{i}{m}\right)^{n m}-1}{\frac{i}{m}}\right]$$

### How do you calculate the future value of an annuity due?

The future value of an annuity due can be defined as the future value of a stream of equal payments or received made at the beginning of the period.

It is calculated as follows:

$$FV=C\left[\frac{\left(1+\frac{i}{m}\right)^{n m}-1}{\frac{i}{m}}\right]\left(1+\frac{i}{m}\right)$$

### What does m stand for in annuity?

m stands for compounding frequency of the annuity, which is the number of times the interest of an annuity will be compound in a year.

If the annuity compounds once a year, then m equals 1.

If the annuity is compounded semi-annually, m is equal to 2.

m will equal 12 if the annuity compounds monthly.

### What is n in annuity?

n stands for number of periods, which is the number of periods over which payments must be made.

### What is C in annuity?

C/PMT in annuity stands for the amount of each periodic payment.

That is, PMT refers to the amount that will be paid at the beginning/end of each period.

### What is i in annuity?

The annual interest rate (r) is the rate of interest at which an annuity is compounded per periods

It refers to the rate of return which apply to a annuity for a year.

Some authors refer to i as r. They mean the same thing.

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