- Future Value Of Annuity:
- What does Future Value of Annuity mean?
- The future value of an annuity measures how much a person would have in the future at a specific rate of return or discount rate.
- FV of Annuity = P [((1 + r)n - 1) / r]
- P - Periodic Payment
- r - Rate per Period
- n - Number of Periods
A man decides to save by depositing $1000 into an account per year for a term of 5 years. The effective annual rate on the account is 2%. If he wants to determine the balance after 5 years, then according to the above formula; the balance after the 5th year would be $5204.04.
- Jun 4, 2018
- Tool Launched