Future Value Formula Annuity Ordinary and Due

What is Future Value of Annuity

Future Value Formula Annuity measures the value of a series of payments, specified interest rate is provided, at some point in future.

In simple words, it’s the sum of the future value of each annuity payment. Fortunately, you do not have to compute each payment on an individual basis and add them all up. As per annuity formula you can calculate the future value of an ordinary annuity.

What is Present Value Formula of Annuity?

 

Ordinary Annuity

FV = A x [(1+i)n – 1 / i)

 

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Annuity Due

FV = A x [(1+i)n – 1 / i) x (1 + i)

 

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Whereas,

  • FV = Future Value of Annuity
  • A   = Cash Flow Per Period
  • i     = Interest Rate
  • n    = Number of Payments

What is Present Value Formula of Annuity?

 

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