Calculate the future value of a series of fixed payments made over a specified period.
Enter any lump sum you are starting with.
The amount you will deposit regularly.
The yearly rate of return on your investment.
The total number of payment periods (e.g., years, months).
How many times per year payments are made (e.g., 1 for annually, 12 for monthly).
Total Future Value
0.00
Understanding Fixed Term Annuities and Future Value
A fixed term annuity is a financial product that allows an individual to invest a sum of money over a defined period, often with regular contributions, earning a fixed rate of interest. At the end of the term, the investor receives the accumulated capital along with all the earned interest. These are commonly used for long-term savings goals like retirement, education funding, or major purchases.
The core concept behind calculating the future value of a fixed term annuity is to determine how much your investment will grow to, considering both your contributions and the compounding interest earned over time. This calculation is crucial for financial planning, helping you understand if you are on track to meet your financial objectives.
The Math Behind the Calculation
The future value (FV) of a fixed term annuity can be calculated by summing the future value of the initial deposit (if any) and the future value of the series of periodic payments. The formula accounts for compounding interest.
1. Future Value of the Initial Deposit
If you have an initial deposit (P), an interest rate per period (i), and the total number of periods (n), its future value is calculated as:
FV_initial = P * (1 + i)^n
2. Future Value of the Ordinary Annuity (Periodic Payments)
For a series of regular payments (PMT), the future value of an ordinary annuity is calculated using the formula:
FV_annuity = PMT * [((1 + i)^n - 1) / i]
Where:
PMT is the periodic payment amount.
i is the interest rate per period.
n is the total number of periods.
3. Total Future Value
The total future value is the sum of the future value of the initial deposit and the future value of the annuity payments:
Important Note: The formulas above assume interest is compounded at the same frequency as payments. In our calculator, we first determine the interest rate per period based on the annual rate and payment frequency.
Calculator Inputs Explained
Initial Deposit (Optional): A one-time lump sum you deposit at the beginning.
Periodic Payment: The fixed amount you contribute at regular intervals (e.g., monthly, annually).
Annual Interest Rate (%): The stated yearly interest rate. This will be converted to a rate per period.
Number of Periods: The total duration of the investment, often expressed in years.
Payments per Year: Indicates how frequently payments are made within a year (e.g., 1 for yearly, 4 for quarterly, 12 for monthly). This helps adjust the interest rate and number of periods accordingly.
When to Use This Calculator
Planning for retirement savings.
Estimating the growth of regular savings accounts or investment plans.
Calculating the future value of a scholarship or educational fund.
Understanding the long-term impact of consistent investing.
By using this calculator, you can gain a clearer picture of your investment's potential growth, enabling more informed financial decisions.
function calculateAnnuity() {
var initialDeposit = parseFloat(document.getElementById('initialDeposit').value);
var periodicPayment = parseFloat(document.getElementById('periodicPayment').value);
var annualInterestRate = parseFloat(document.getElementById('annualInterestRate').value);
var numberOfPeriods = parseFloat(document.getElementById('numberOfPeriods').value);
var paymentFrequency = parseFloat(document.getElementById('paymentFrequency').value);
var resultElement = document.getElementById('result');
var resultValueElement = document.getElementById('resultValue');
// Clear previous results and styles
resultElement.style.display = 'none';
resultValueElement.textContent = '0.00';
// Input validation
if (isNaN(periodicPayment) || periodicPayment < 0) {
alert("Please enter a valid periodic payment amount.");
return;
}
if (isNaN(annualInterestRate) || annualInterestRate < 0) {
alert("Please enter a valid annual interest rate.");
return;
}
if (isNaN(numberOfPeriods) || numberOfPeriods <= 0) {
alert("Please enter a valid number of periods.");
return;
}
if (isNaN(paymentFrequency) || paymentFrequency <= 0) {
alert("Please enter a valid payment frequency (payments per year).");
return;
}
if (isNaN(initialDeposit) || initialDeposit 0) {
// Calculate future value of initial deposit
fvInitialDeposit = initialDeposit * Math.pow(1 + ratePerPeriod, totalPeriods);
}
var fvAnnuity = 0;
if (periodicPayment > 0 && ratePerPeriod > 0) {
// Calculate future value of the annuity payments (ordinary annuity)
fvAnnuity = periodicPayment * ((Math.pow(1 + ratePerPeriod, totalPeriods) – 1) / ratePerPeriod);
} else if (periodicPayment > 0 && ratePerPeriod === 0) {
// Handle case where interest rate is zero
fvAnnuity = periodicPayment * totalPeriods;
}
var totalFutureValue = fvInitialDeposit + fvAnnuity;
// Format the result to two decimal places
resultValueElement.textContent = totalFutureValue.toLocaleString(undefined, {
minimumFractionDigits: 2,
maximumFractionDigits: 2
});
resultElement.style.display = 'block';
}