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Therefore, the future value of your annuity due with $1,000 annual payments at a 5 percent interest rate for five years would be about $5,801.91.
The future value of an annuity is the amount that regular payments will be worth at some point in the future at a specific interest rate. ... To calculate the future value, use this formula: (FV ...
This formula gives the future value (FV) of an ordinary annuity (assuming compound interest): [4] = (+) ( ) where r = interest rate; n = number of periods. The simplest way to understand the above formula is to cognitively split the right side of the equation into two parts, the payment amount, and the ratio of compounding over basic interest.
The future value of an annuity is the accumulated amount, including payments and interest, of a stream of payments made to an interest-bearing account. For an annuity-immediate, it is the value immediately after the n-th payment. The future value is given by: ¯ | = (+),
Future value of an annuity (FVA): The future value of a stream of payments (annuity), assuming the payments are invested at a given rate of interest. There are several basic equations that represent the equalities listed above. The solutions may be found using (in most cases) the formulas, a financial calculator or a spreadsheet. The formulas ...
By applying the future value of annuity formula, you can gauge the growth potential of your annuity, Annuities often have high fees compared to similar financial products such as mutual funds or S ...