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Future Value of Annuity Calculator
Calculate the future value of a series of equal payments (annuity). Works for ordinary annuity (end of period) and annuity due (beginning of period) with compound interest.
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Ordinary: payments at end of period. Due: payments at start.
Calculate the future value of a series of equal payments (annuity). Works for ordinary annuity (end of period) and annuity due (beginning of period) with compound interest.
Future Value of Annuity
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Sources & Methodology
✓Formulas and reference data verified against authoritative sources listed below.
Clear explanation of ordinary annuity vs. annuity due future value formulas
Methodology: Ordinary annuity FV = PMT × [(1+r)ⁿ − 1] / r. Annuity due FV = Ordinary FV × (1+r). When r = 0: FV = PMT × n. Interest earned = FV − (PMT × n). All calculations use the nominal rate entered as the periodic rate.
⏱ Last reviewed: April 2026
How to Calculate Future Value of an Annuity
An annuity is a series of equal periodic payments made at regular intervals. The future value of an annuity tells you how much your stream of payments will be worth at a future point in time, accounting for compound interest. This is fundamental to retirement planning, savings analysis, and financial decision-making.
Ordinary Annuity vs. Annuity Due
An ordinary annuity (also called annuity-immediate) makes payments at the end of each period. An annuity due makes payments at the beginning of each period. The annuity due is worth more because each payment has an extra period to earn interest. FV_due = FV_ordinary × (1 + r).
The Future Value Annuity Formula
For an ordinary annuity: FV = PMT × [(1+r)ⁿ − 1] / r. For example, $500/month for 30 years at 7% annual rate: FV = 500 × [(1.07)³° − 1] / 0.07 = 500 × 94.46 = $47,228. Note that for monthly compounding, use r = 7%/12 = 0.583% per period.
Power of Compound Interest in Annuities
The difference between total payments and future value is entirely due to compound interest. $500/month for 30 years represents $180,000 in contributions. At 7% annual return, the future value is $566,764 — the extra $386,764 is compound interest. This illustrates why starting early and maintaining consistent contributions is so powerful.
Using FV for Retirement Planning
The future value of annuity formula answers 'How much will my contributions be worth at retirement?' If you contribute $600/month to a 401(k) earning 8%/year for 35 years, the FV = $1,216,793. This calculation helps determine whether your savings rate is sufficient for your retirement goals.
FV = PMT × [(1 + r)ⁿ − 1] ÷ r
For ordinary annuity: FV = PMT × [(1+r)ⁿ − 1] / r. For annuity due, multiply by (1+r): FV_due = FV_ordinary × (1+r). Where PMT = payment per period, r = periodic interest rate, n = number of periods.
Future Value Annuity Formula
Monthly Payment
Years
Rate
Future Value
$200
30
7%
$226,514
$500
30
7%
$566,285
$500
30
10%
$986,964
$1,000
30
7%
$1,132,570
$1,000
20
8%
$587,070
$2,000
25
6%
$1,393,840
💡 Planning Tip: The future value formula assumes a constant interest rate over all periods. For retirement planning, use a conservative long-term return assumption (5–7% for balanced portfolios) rather than recent market performance. Monte Carlo simulations account for return variability better than the fixed-rate FV formula.
Frequently Asked Questions
The future value of an annuity is the total value of a stream of equal periodic payments at a specific future date, including all compound interest earned. It answers the question: if I invest $X per period at Y% return, how much will I have in N periods?
An ordinary annuity makes payments at the end of each period. An annuity due makes payments at the beginning of each period. Because annuity-due payments start earlier, each payment earns one more period of interest, making the annuity due worth more by a factor of (1 + r).
Use the monthly interest rate: r = Annual Rate / 12. For example, 7% annual = 0.5833% monthly. Use the monthly rate in the formula with n = total months. $500/month for 30 years at 7% annual (0.5833% monthly, 360 periods): FV = 500 × [(1.005833)³⁶° − 1] / 0.005833 = $566,285.
When r = 0, no interest is earned. The future value equals the total of all payments: FV = PMT × n. There is no compounding.
Higher interest rates dramatically increase FV due to compounding. $500/month for 30 years at 5% = $414,470. At 7% = $566,285. At 10% = $986,964. The difference between 5% and 10% is $572,494 — a 138% increase in FV from doubling the rate.
Longer investment periods have an exponential effect. $500/month for 20 years at 7% = $251,562. At 30 years = $566,285. At 40 years = $1,197,811. The extra 10 years from 30 to 40 more than doubles the future value, demonstrating the power of compound interest over time.
Conservative retirement planning uses 5–7% for balanced portfolios (60% stocks, 40% bonds). Aggressive all-stock portfolios might use 8–10% but with higher risk. Financial planners commonly use 6% as a reasonable long-term real (after-inflation) assumption.
FV of a lump sum: FV = PV × (1+r)ⁿ. This calculates the future value of a single investment made today. FV of an annuity calculates the accumulated value of regular equal payments over time. Most retirement savings use the annuity formula since people contribute regularly.
For mortgage analysis, you typically use the present value of annuity formula (not future value), which calculates the loan amount from the payment amount, rate, and term. The future value formula is more useful for savings and investment accumulation scenarios.
Starting at 25 vs. 30 with $500/month at 7% for 40 vs. 35 years: 40 years = $1,197,811 vs. 35 years = $831,012. Starting 5 years earlier adds $366,799 — 44% more wealth from just 5 additional years of contributions.