Our Growing Annuity Calculator helps you determine the future value or present value of a series of payments that increase at a constant rate. Perfect for financial planning, retirement savings, and understanding investments with inflation adjustments. Easily project your financial growth today.
Formula:
A growing annuity involves a series of payments that grow at a constant rate (g) over time. The primary formulas are:
Present Value (PV) of a Growing Annuity:
- When the interest rate (r) is NOT equal to the growth rate (g):
PV = P × [1 - ((1 + g) / (1 + r))n] / (r - g) - When the interest rate (r) IS equal to the growth rate (g):
PV = P × n / (1 + r)
Future Value (FV) of a Growing Annuity:
- When the interest rate (r) is NOT equal to the growth rate (g):
FV = P × [( (1 + r)n - (1 + g)n ) / (r - g)] - When the interest rate (r) IS equal to the growth rate (g):
FV = P × n × (1 + r)(n - 1)
Where:
- P = The amount of the first payment in the series
- r = The interest rate per period (as a decimal)
- g = The growth rate per period of the payments (as a decimal)
- n = The total number of periods
For an Annuity Due, the result is multiplied by (1 + r).