What Is the Future Value of an Annuity? The future value of an annuity is the value of a group of recurring payments at a certain date in the future, assuming a particular rate of return, or adiscount rate. The higher the discount rate, the greater the annuity's future value. As long...
Future value factor (FVF) is the equivalent value at some future date of a cash flow at time 0 or a series of cash flows that occur after equal time interval.
Future Value Factor = (1 + r)n Future Value Factor Table You can also use the future value factor table to find the value of a future value factor. The following is the future value factor table that shows the values of a future value factor for interest rates ranging from 1% to 30%...
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A tabl eo ffuture valu einteres tfactor si sshown.Tabl eo ffutur evalue interes tfactors Period Interes trat epe rperiod1%2%3%4%5%11.00001.00001.00001.00001.000022.01002.02002.03002.04002.050033.03013.06043.09093.12163.152544.06044.12164.1836 A tabl eo ffuture valu einteres tfactor si sshown.Tabl...
date at a specific rate of return or discount rate. The value of the future annuity increases with the rate to determine how valuable a series of payments will be at some point in the future.The FV functionused to determine the future value annuity factor is depicted in the following ...
These formulas can show you how to calculate the present value and future value of ordinary annuities and annuities due. That info can aid your financial planning.
The Present Value of an AnnuityThe present value of an annuity (PVA) is the sum of the present value of each annuity payment. Since the present value of a lump sum payment is simply the future value of that payment divided by the interest factor (1 + r)n, the present value of an ...
The future value of an annuity due is higher than the future value of an (ordinary) annuity by the factor of one plus the periodic interest rate. This is because due to the advance nature of cash flows, each cash flow is subject to compounding effect for