Fv Pmt 1 I N 1 I Calculator

This calculator helps you determine the future value of an annuity due (FV) when you know the payment amount (PMT), interest rate (I), and number of periods (N). An annuity due is a series of equal payments made at the beginning of each period, with the first payment made immediately.

What is FV PMT 1 I N 1 I?

The FV PMT 1 I N 1 I calculation determines the future value of an annuity due, where payments are made at the beginning of each period. This is different from a regular annuity where payments are made at the end of each period.

Annuity due calculations are commonly used in finance to evaluate the growth of investments where payments are made immediately at the start of each period. The formula accounts for the immediate receipt of the first payment.

Formula

The future value of an annuity due (FV) is calculated using the following formula:

FV = PMT × [(1 + I)^N - 1] / I + PMT

Where:

FV = Future Value
PMT = Payment amount at the beginning of each period
I = Interest rate per period
N = Number of periods

This formula accounts for the immediate receipt of the first payment and the compounding of subsequent payments.

How to Use This Calculator

Enter the payment amount (PMT) in the first field.
Enter the interest rate per period (I) in the second field.
Enter the number of periods (N) in the third field.
Click the "Calculate" button to compute the future value.
Review the result and chart showing the growth of the annuity due.

Note: The interest rate should be entered as a decimal (e.g., 5% = 0.05). The number of periods should be an integer.

Example Calculation

Suppose you make monthly payments of $100 at the beginning of each month, with an annual interest rate of 12%, and you want to know the future value after 24 months.

The monthly interest rate is 12%/12 = 1% = 0.01.

Using the formula:

FV = 100 × [(1 + 0.01)^24 - 1] / 0.01 + 100

FV = 100 × [1.2682 - 1] / 0.01 + 100

FV = 100 × 26.82 + 100 = 2682 + 100 = $2782

The future value of this annuity due after 24 months is $2782.

FAQ

What is the difference between an annuity due and a regular annuity?: An annuity due pays at the beginning of each period, while a regular annuity pays at the end of each period. This affects the calculation of future value.
How do I convert an annual interest rate to a monthly rate?: Divide the annual interest rate by 12 to get the monthly rate. For example, 12% annual becomes 1% monthly.
Can I use this calculator for daily payments?: Yes, you can adjust the interest rate and number of periods accordingly. For daily payments, use the daily interest rate and total number of days.
What if I want to calculate the present value instead?: You would use the present value of an annuity due formula, which is the inverse of this calculation.