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-   -   Future Value: Annuity versus annuity due (https://www.askmehelpdesk.com/showthread.php?t=196983)

  • Mar 21, 2008, 07:06 AM
    selmamarla3
    Future Value: Annuity versus annuity due
    What's the future value of a 7 percent, 5 year ordinary annuity that pays $300 each year? If this were annuity due, what would its future value Be?
  • Mar 23, 2008, 03:00 PM
    morgaine300


    Where i = interest per compounding period, and n = total number of compounding periods.
    Since yours is annual, i just equals the yearly interest rate and n equals the years.

    That is the equation, but I don't know how you need to solve it. This can be done with charts, financial calculators and Excel.

    I don't remember the adjustment for an annuity due cause I never do them. I think you add one to n, and then subtract one payment from the final answer. If I have time, I'll try to look that up if someone doesn't beat me to it.
  • Mar 13, 2012, 05:18 AM
    victoriaber

    = 300[((1 + 0.07)5-1)/0.07]
    = 1725.22

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