Future Value of Annuity Due Calculator: Plan Your Financial Growth
The calculator multiplies each start-of-period deposit by one extra compounding period, so an annuity due can finish about 5 % larger than an ordinary annuity at a 5 % rate (Damodaran, 2020).
Future Value of Annuity Due Calculator
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How to use the tool
Enter your periodic payment
• Example A: $650 each month.
• Example B: $900 each quarter.
Fill in the number of periods
• Example A: 240 months (20 years).
• Example B: 48 quarters (12 years).
Add the interest rate per period
• Example A: 0.5 % monthly (≈6 % nominal annual).
• Example B: 1.8 % quarterly (≈7.2 % nominal annual).
Select “Calculate.” The tool displays the future value in your currency.
Compare scenarios. Adjust any field to see how payment size, length, or rate changes outcomes.
Formula the calculator uses
For a payment made at the beginning of each period:
Monthly plan (Example A)
$650 × rac{(1+0.005)^{240}-1}{0.005} × 1.005 ≈ $301 ,542.
Quarterly plan (Example B)
$900 × rac{(1+0.018)^{48}-1}{0.018} × 1.018 ≈ $69 ,066.
Quick-Facts
Average U.S. savings rate: 0.45 % APR (FDIC.gov, 2024).
IRA contribution cap 2024: $7,000 per year (IRS Pub 590-A, 2023).
Annuity-due premium: ~5 % higher value than ordinary annuity at 5 % rate (Damodaran, 2020).
TVM convention: Formula aligns with CFA Level I curriculum (CFA Institute, 2022).
FAQ
What is the future value of an annuity due?
It is the amount you will have when equal deposits made at each period’s start compound for n periods at rate r.
Why is an annuity due worth more than an ordinary annuity?
Each payment earns one extra period of interest, boosting the final sum by roughly (1 + r) times (Investopedia, “Annuity Due”).
Which rate should I enter—nominal or effective?
Enter the effective rate per period. Divide an annual nominal rate by payment frequency to approximate it (Federal Reserve, 2023).
Can I model annual inflation?
No. Subtract expected inflation from the nominal rate to input a real rate, then recalculate (BLS CPI FAQ, 2023).
Does the tool support irregular deposits?
No. The math assumes identical payments. Run separate calculations or use a spreadsheet for uneven schedules.
Is the calculation exact?
Yes for the stated inputs; actual returns vary with rate changes and taxes (SEC Investor Bulletin, 2022).
How do I compare two savings plans quickly?
Change one variable—rate, amount, or periods—while holding others constant and note the displayed difference.
Can I use other currencies?
Yes. The formula is currency-agnostic; ensure you keep the same currency for all inputs and interpretations.
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