Future Value Annuity Calculator



This short article will educate you a bit about future value of annuity and its related terms to help you understand the concept. The definition of annuity is anything that gets equal payments that occur in equal increments (every month, every year, etc.) Rental, mortgage, and lease payments are examples of annuity. Regular retirement account contributions are another example. The payments that happen at the end of a period are referred to as ordinary annuity. Payments that happen at the beginning of each period are called annuity due. It is called an annuity because the period in which payments are usually (but obviously not always) received is annually. Hence the name - annuity.



Future Value of Annuity is an accounting and finance term that describes the future value of fixed promised (or expected) payments at the end of a period (a month, a year, etc) that are deposited over time and are allowed to grow in value by the issuance of compounded interest.


Many people find it much easier to calculate future value of annuity by using a future value annuity calculator. This is an online calculator that will make this usually tedious calculation quicker to perform and may be more accurate than pen and paper analysis as there is less room for error with an online annuity future value calculator.

One good use for a future value of annuity calculator is to try to determine the future value of a retirement account based on its current investments. Most future annuity calculators take into account the current balance, size, and time period over which the payments will be dispersed. Then the final calculated value is given in three possibilities: in 20 years, in 25 years, and in 30 years. This is definitely a lot faster and simpler than trying to use the future of annuity formula to calculate it yourself.

But in case you are interested, to explain a bit more future annuity can be calculated with a future annuity formula which takes the future value of each individual payment in the group using a future value formula and adding up the results. The future of annuity formula can easily be found online if you really want it.