Future Value of Annuity Calculator
Find what a stream of equal payments grows to. Enter the payment amount, annual interest rate, and years; choose monthly, quarterly, or annual payments and ordinary (end-of-period) or annuity-due (start-of-period) timing.
Example: with Payment per period ($) 500 · Annual interest rate (%) 7 · Years of payments 20 · Payment & compounding frequency Monthly (12/yr) · Payment timing Ordinary annuity (end of period) → Future value: $260,463.
- Total contributions$120,000 (240 payments)
- Growth from interest$140,463 earned as interest
Computed by the calculator below using its default values. Change any input to see your own numbers.
FV = PMT × [((1+i)ⁿ − 1) ÷ i], the standard TVM annuity formula; annuity due multiplies by (1+i) because each payment compounds one extra period.
How the future value of an annuity works
An annuity here just means equal payments at equal intervals — a $500 monthly deposit, a $1,000 annual IRA contribution. Each payment compounds from the moment it lands until the end, so early payments do far more work than late ones. The closed-form factor ((1+i)ⁿ − 1) ÷ i adds up all n compounding paths at once: multiply it by your payment and you have the ending balance.
Timing matters more than people expect. An ordinary annuity pays at the end of each period; an annuity due pays at the start, giving every payment one extra period of growth, which multiplies the whole result by (1+i). For $1,000 a year at 6% for 10 years, that is $13,181 versus $13,972 — the same $10,000 in, about $791 apart.
Why the interest share keeps growing
In the default example — $500 a month at 7% for 20 years — you deposit $120,000 but end with about $260,463. More than half the final balance is compounding, not contributions, and the split tilts further with time: the same deposits for 30 years reach roughly $609,985, with interest making up over 70%. This is the practical argument for starting early rather than saving more later.
How it’s calculated
Ordinary annuity: FV = PMT × ((1+i)ⁿ − 1) ÷ i, with i = annual rate ÷ periods per year and n = years × periods per year. Annuity due: multiply by (1+i). If i = 0, FV = PMT × n. Payment and compounding frequency are assumed equal.
Assumes a level payment and a constant rate for the whole term, with no taxes or fees — real investment returns vary year to year.
What $500/month becomes at 7% (ordinary annuity)
| Years | Total deposited | Future value |
|---|---|---|
| 5 | $30,000 | $35,796 |
| 10 | $60,000 | $86,542 |
| 20 | $120,000 | $260,463 |
| 30 | $180,000 | $609,985 |
Computed with FV = 500 × ((1 + 0.07/12)ⁿ − 1) ÷ (0.07/12); rounded to the dollar.
Common mistakes
- Using the annual rate per month without dividing by 12 — at 7%/yr the monthly i is 0.5833%, not 7%.
- Mixing frequencies: monthly payments with an annual n, or vice versa. n must count payments, not years.
- Forgetting the (1+i) bump for start-of-period deposits — payroll-style contributions on the 1st are closer to an annuity due.
- Reading the result as spendable money — it is a pre-tax, pre-fee projection at an assumed constant rate.
Frequently asked questions
What is the future value of annuity formula?
FV = PMT × ((1+i)ⁿ − 1) ÷ i, where PMT is the payment per period, i the periodic rate, and n the number of payments. For an annuity due, multiply the result by (1+i).
What is the difference between an ordinary annuity and an annuity due?
Ordinary annuities pay at the end of each period; annuities due pay at the start. Every annuity-due payment compounds one extra period, so its FV is exactly (1+i) times larger.
Why does my answer differ from a table of FV factors?
Printed FVIFA tables round the factor to 3 or 4 decimals and usually assume annual periods. This tool computes the factor at full precision with your actual payment frequency, so small differences are expected.
Does this account for inflation or taxes?
No — the result is a nominal, pre-tax balance. To think in today's purchasing power, discount the result or rerun it with a real (inflation-adjusted) rate, roughly nominal minus inflation.