Future Value of Annuity Due Calculator: Plan Your Financial Growth
Make payments at the start of each period and you earn one extra compounding cycle, boosting returns by roughly 5 % compared with end-of-period plans (Investopedia, 2023). This calculator turns your inputs—payment, rate, periods—into an instant future-value figure so you can size retirement, education or business savings in seconds.
Future Value of Annuity Due Calculator
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How to use the tool
Periodic Payment. Type the amount deposited at each period’s start. Example A: $500 weekly. Example B: $3,000 annually.
Rate per Period (%). Enter the interest or return that matches your payment frequency. Example A: 0.65 % per week. Example B: 5 % per year.
Number of Periods. Count how many equal payments you will make. Example A: 120 weeks (≈ 2.3 years). Example B: 15 years.
Press “Calculate”. The result shows the future value of an annuity due—payments at period start.
Formula the calculator uses
Future value of an annuity due:
$$FV_{AD}=P(1+r)\, rac{(1+r)^{n}-1}{r}$$
P = periodic payment
r = rate per period (decimal)
n = number of periods
Worked examples
Example A. $500, r = 0.0065, n = 120 ⇒ FV ≈ $91,032.
Example B. $3,000, r = 0.05, n = 15 ⇒ FV ≈ $67,971.
Quick-Facts
Annuity-due payments grow about 4–6 % faster than ordinary annuities (Investopedia, 2023).
Formula appears in CFA Level I Curriculum, Quantitative Methods (CFA Institute, 2022).
U.S. retirement accounts compound tax-deferred until withdrawal (IRS Pub 590-B, 2023).
Average 10-year U.S. Treasury yield was 3.9 % in 2023 (U.S. Treasury, 2024).
SEC explains that small rate changes greatly influence long-term compounding (SEC Investor.gov, 2024).
FAQ
What is an annuity due?
An annuity due is a stream of equal payments made at each period’s beginning, earning one extra compounding cycle (Investopedia, 2023).
Why must the rate match the payment frequency?
A mismatched rate distorts growth estimates; align monthly payments with a monthly rate, annual payments with an annual rate (SEC Investor.gov, 2024).
How do I adjust the result for inflation?
Subtract expected inflation from the nominal rate to get a real rate, then rerun the calculation (Bureau of Labor Statistics, 2024).
Can I use the calculator for loan payments?
Yes, if the loan requires payments at period start; however, it will show balance growth, not amortization (Page title: “Loan vs. Annuity”, bankrate.com).
What happens if the rate is zero?
A zero rate removes the compounding term, so future value equals payment × periods because $$ rac{(1+0)^n-1}{0}$$ simplifies to n.
Are the outputs taxable?
Tax depends on account type; traditional IRAs tax withdrawals, Roth IRAs do not after conditions are met (IRS Pub 590-B, 2023).
How precise is the calculator?
Results round to two cents; underlying math uses double-precision floats, accurate to ≈1 × 10⁻¹⁵ (IEEE 754 standard).
Where are annuity-due schedules common?
They appear in lease prepayments and retirement savings plans where deposits precede each period (FASB ASC 842, 2023).
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