- Enter the annual interest rate, number of periods, initial investment, periodic payment, and compounding frequency.
- Click "Generate Table" to calculate and display the future value table.
- Click "Clear Results" to reset the table.
- Click "Copy Results" to copy the table to the clipboard.
The future value of an annuity can be calculated using the following formula:
Future Value = PMT * [(1 + r/n)^(nt) - 1] / (r/n)
Where:
PMT = Periodic Payment
r = Annual Interest Rate (as a decimal)
n = Number of Compounding Periods per Year
t = Number of Years
In this calculation, we iterate through each period, apply the formula, and calculate the future value of the annuity.
Concepts
An annuity is a series of equal payments made at regular intervals, such as annually, quarterly, or monthly. The future value of an annuity is the value of the annuity payments at a future date, taking into account the interest earned on the payments.
The future value of an annuity can be calculated using the following formula:
FV = PMT * ((1 + i)^n - 1) / i
Where:
- FV is the future value of the annuity
- PMT is the amount of each annuity payment
- i is the interest rate per period
- n is the number of periods
Formulae
The following formula is used to calculate the future value of $1 annuity table:
FV = (1 + i)^n
Where:
- FV is the future value of the $1 annuity
- i is the interest rate per period
- n is the number of periods
Benefits
There are several benefits to using a future value of $1 annuity table:
- Convenience: Future value of $1 annuity tables are very convenient to use. They can be found online or in financial planning books.
- Accuracy: Future value of $1 annuity tables are very accurate. They consider the compounding of interest, which is important for calculating the future value of an annuity.
- Speed: Future value of $1 annuity tables can be used to calculate the future value of an annuity quickly. This can be helpful for people who need to calculate the future value of an annuity on a regular basis.
Interesting facts
- The future value of an annuity is affected by three factors: the amount of each annuity payment, the interest rate, and the number of periods.
- The higher the interest rate, the higher the future value of the annuity will be.
- The longer the number of periods, the higher the future value of the annuity will be.
Scholarly References
Here are some scholarly references on future value of $1 annuity tables:
- Financial Mathematics: A Practical Guide by John C. Hull (2017)
- Investments by Zvi Bodie, Alex Kane, and Alan J. Krauer (2020)
- The Mathematics of Personal Finance by Robert D. Merton (2019)
Applications
Future value of $1 annuity tables are used in a variety of applications, including:
- Retirement planning: Retirement planners use future value of $1 annuity tables to calculate how much money a person needs to save for retirement.
- Financial planning: Financial planners use future value of $1 annuity tables to help their clients plan for their financial goals, such as saving for college or buying a house.
- Investing: Investors use future value of $1 annuity tables to calculate the potential return on their investments.
Conclusion
Future value of $1 annuity tables are a valuable tool that can be used for a variety of purposes. They are convenient, accurate, and fast. If you need to calculate the future value of an annuity, be sure to use a future value of $1 annuity table.
Here are some additional examples of how future value of $1 annuity tables can be used:
- A person can use a future value of $1 annuity table to calculate how much money they need to save for retirement.
- A parent can use a future value of $1 annuity table to calculate how much money they need to save for their child’s college education.
- An investor can use a future value of $1 annuity table to calculate how much money their investment could grow to over time.
Future value of $1 annuity tables are an essential tool for anyone who needs to calculate the future value of an annuity for any purpose.
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