- Future Value Annuity Due:
- What does Future Value of Annuity Due mean?
- The Future Value of Annuity Due formula calculates the value at a future date. It means the value of a sum of cash to be paid on a specific date in the future.
- FV of Annuity Due = (1 + r) x P [((1 + r)n - 1) / r]
- P - Periodic Payment
- r - Rate per Period
- n - Number of Periods
Let’s assume an individual wants to calculate the future balance after 5 years. Today being the first deposit; the amount deposited per year is $1,000 and the account with an effective rate of 3% per year. It is important to note that the last cash flow is received one year prior to the end of the 5th year.
According to the formula, the balance after 5 years would be $5468.41.
- May 22, 2018
- Tool Launched