What is Annuity?
An annuity is a financial product or arrangement that involves a series of periodic payments or receipts made at equal intervals. These payments can occur monthly, quarterly, annually, or at other regular time intervals. Annuities are often used as a tool for retirement planning, where individuals make regular contributions during their working years and receive a stream of income during their retirement. There are different types of annuities, including fixed annuities with predetermined payments and variable annuities where the payments are linked to the performance of underlying investments. Annuities provide a way for individuals to convert a lump sum of money into a steady income stream, offering financial security over an extended period. However, the specific terms and features of annuities can vary, and individuals should carefully consider their financial goals and needs before entering into an annuity contract.
How to Calculate Future Worth of Annuity?
Future Worth of Annuity calculator uses Future Worth of an Annuity = Annuity*(((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)/(Discrete Compound Interest Rate)) to calculate the Future Worth of an Annuity, The Future Worth of Annuity formula is defined as a financial metric that represents the total value of a series of equal cash flows or payments received or paid at regular intervals over time. Future Worth of an Annuity is denoted by F symbol.
How to calculate Future Worth of Annuity using this online calculator? To use this online calculator for Future Worth of Annuity, enter Annuity (A), Discrete Compound Interest Rate (i) & Number of Interest Periods (n) and hit the calculate button. Here is how the Future Worth of Annuity calculation can be explained with given input values -> 3152.5 = 1000*(((1+0.05)^(2)-1)/(0.05)).