# Future Value of Annuity Calculator

[loan]
$$$PV =$$ The constant payment made at each period.. [rate] [loan] * ( ( Math.pow( (1 + [rate]*0.01/12 ), [period] *12 ) - 1) / ([rate]*0.01/12 ) )$
Future Value of Annuity
$## Future Value of Annuity Calculator The future value of an annuity is the amount of money that an annuity will be worth at the end of a specified period, given a certain interest rate and payment schedule. An annuity is a series of equal payments made at regular intervals over time. The future value calculates how much these payments will grow to, considering the compound interest earned on each payment. #### What a Future Value of Annuity Calculator Does: 1. Inputs: • Payment Amount (P): The amount of each regular payment or deposit. • Interest Rate (r): The periodic interest rate (usually annual, but could be monthly, quarterly, etc.). • Number of Periods (n): The total number of payments or periods over which the payments are made. • Compounding Frequency: How often the interest is compounded (monthly, annually, etc.). 2. Calculation: • Uses the formula for the future value of an annuity to compute the total amount accumulated at the end of the investment period. #### Future Value of an Annuity Formula: The formula to calculate the future value of an annuity (FV) is: $\text{FV} = P \times \frac{(1 + r)^n – 1}{r}$ Where: – $$\text{FV}$$ = Future Value of the annuity – $$P$$ = Payment amount per period – $$r$$ = Interest rate per period – $$n$$ = Total number of payments #### Benefits of Using a Future Value of Annuity Calculator: • Accuracy: Ensures precise calculations without manual errors. • Time-Saving: Quickly computes results, saving you from complex and time-consuming manual calculations. • Planning: Helps in financial planning by showing how much your regular investments will grow over time. • Comparison: Allows you to compare different investment scenarios by adjusting payment amounts, interest rates, and periods. #### Example Let’s say you want to calculate the future value of an annuity where you make monthly deposits of$200 into an account that earns an annual interest rate of 6%, compounded monthly, for 5 years.

Step-by-Step Calculation:

1. Identify the Variables:

– $$P$$ (monthly payment) = $200 – Annual interest rate = 6% or 0.06 – Monthly interest rate $$r$$ = Annual interest rate / 12 = 0.06 / 12 = 0.005 – Total number of payments $$n$$ = Number of years × 12 = 5 × 12 = 60 2. Plug the Values into the Formula: $\text{FV} = 200 \times \frac{(1 + 0.005)^{60} – 1}{0.005}$ 3. Perform the Calculation: – First, calculate $$(1 + 0.005)^{60}$$: $(1 + 0.005)^{60} \approx 1.34885$ – Subtract 1 from the result: $1.34885 – 1 = 0.34885$ – Divide by the interest rate per period: $\frac{0.34885}{0.005} = 69.77$ – Multiply by the payment amount: $200 \times 69.77 \approx 13,954$ Result: The future value of the annuity is approximately$13,954.

To find the future value of an annuity, you need to know the amount of each payment, the interest rate, and the number of payments. By using the formula $$\text{FV} = P \times \frac{(1 + r)^n – 1}{r}$$, you can determine how much your series of payments will be worth at the end of the specified period.