# Future Value of an Annuity Calculator

Calculate compound or simple interest earned on a series of investments
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An annuity, as used here, is a series of regular, periodic payments to or withdrawals from an investment account. Wikipedia lists these examples of annuities "regular deposits to a savings account, monthly home mortgage payments, monthly insurance payments, and pension payments." We can classify annuities by the frequency of the cash flow dates. The investor may make deposits (withdrawals, payments) weekly, monthly, quarterly, yearly, or at any other regular interval of time. This calculator supports eleven frequencies.

The future value of an annuity is the amount the cash flow will be worth as of a future date. Due to the investment gain or interest earned on the principal (the amount deposited), the final value is greater than the sum of the deposits.

This future value of an annuity (FVA) calculator calculates what the value will be as of any future date. The calculator optionally allows for an initial amount that is not equal to the periodic deposit. This feature enables the user to calculate the FVA for an existing investment.

If the investment is a new investment set the "Starting Amount (PV)" to 0.

This FVA calculator also calculates the future value after a series of withdrawals. If you start with \$1,000,000 and assume it earns 4.0% per year, the calculator will calculate the value after 30 years of \$5,000 monthly withdrawals. To indicate a withdrawal, enter a negative amount.

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### Instructions for the future value of an annuity calculator

• Starting amount (PV): This is the money you have at the beginning of the annuity period. It could be the initial investment amount or the current value of an existing annuity.
• Periodic amount: This is the amount of money you will withdraw (-) from or contribute (+) to the annuity regularly. The terms of the annuity will determine the amount and frequency.
• Number of periods: This is the number of times the periodic cash flow will occur.
• Annual interest rate: This is the interest rate that the annuity will earn. It is expressed as a percentage per year.
• Start date: This is the present value date (see note below). It could be the date you purchase the annuity or another predetermined date.
• First contribution date: This is when you will make your first contribution (or withdrawal) from the annuity. It could be the same as the start date or a later date.
• Cash flow frequency: This is the frequency with which you will contribute to or withdraw from the annuity. It could be monthly, quarterly, annually, or another interval.
• Monthly compounding: This refers to the frequency with which the interest on the annuity will be compounded. If you do not know the compounding frequency, then set it to match the cash flow frequency.

Note: As explained, an annuity is a regular cash flow - either scheduled contributions or withdrawals. However, because this calculator lets the user specify both a first cash flow date and a start date that may not align with the cash flow, the calculator can accurately calculate the future value. This is the case even if the cash flows don't start until years later.

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