Future Value of Annuity Due Formula

Future Value of Annuity Due Formula

Future value of annuity is calculated to determine the future value of the series of payment. This concept is widely used in insurance company.

Annuity Factor =Cx [(1+i)ⁿ-1] x (1+r)

                              i

Example

Amount Deposited= 2000

Period = 5 Years

Interest Rate =9%

Solution

Annuity Factor =C x [(1+i)ⁿ-1] x (1+r)

                               i

= Cx [(1+9%)⁵-1] x (1+9%)

           9%

=5.984 x 1.09

=6.5233

=6.5233 X 2000

=13,047