Future Value of Ordinary Annuity

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Future Value of an Ordinary Annuity Table

An annuity is a series of payments that occur at the same intervals and in the same amounts. An example of an annuity is a series of payments from the buyer of an asset to the seller, where the buyer promises to make a series of regular payments. Thus, Harvest Designs buys a warehouse from Higgins Realty for $1,000,000, and promises to pay for the warehouse with five payments of $200,000, to be paid at intervals of one payment per year; this is an annuity. If the payments are due at the end of a period, the annuity is called an ordinary annuity. If the payments are due at the beginning of a period, the annuity is called an annuity due.

You might want to calculate the future value of an annuity, to see how much a series of investments will be worth as of a future date. You do this by using an interest rate to add interest income to the amount of the annuity. The interest rate can be based on the current amount you are obtaining through other investments, the corporate cost of capital, or some other measure.

An annuity table represents a method for determining the future value of an annuity. The annuity table contains a factor specific to the future value of a series of payments, when a certain interest earnings rate is assumed. When you multiply this factor by one of the payments, you arrive at the future value of the stream of payments. For example, if you expect to make 5 payments of $10,000 each into an investment fund and use an interest rate of 6%, then the factor would be 5.6371 (as noted in the table below at the intersection of the "6%" column and the "n" row of "5" periods. You would then multiply the 5.6371 factor by $10,000 to arrive at a future value of the annuity of $56,371.

Rate Table For the Future Value of an Ordinary Annuity of 1

n	1%	2%	3%	4%	5%	6%	8%	10%	12%
1	1.0000	1.0000	1.0000	1.0000	1.0000	1.0000	1.0000	1.0000	1.0000
2	2.0100	2.0200	2.0300	2.0400	2.0500	2.0600	2.0800	2.1000	2.1200
3	3.0301	3.0604	3.0909	3.1216	3.1525	3.1836	3.2464	3.3100	3.3744
4	4.0604	4.1216	4.1836	4.2465	4.3101	4.3746	4.5061	4.6410	4.7793
5	5.1010	5.2040	5.3091	5.4163	5.5256	5.6371	5.8666	6.1051	6.3529
6	6.1520	6.3081	6.4684	6.6330	6.8019	6.9753	7.3359	7.7156	8.1152
7	7.2135	7.4343	7.6625	7.8983	8.1420	8.3938	8.9228	9.4872	10.0890
8	8.2857	8.5830	8.8923	9.2142	9.5491	9.8975	10.6366	11.4359	12.2997
9	9.3685	9.7546	10.1591	10.5828	11.0266	11.4913	12.4876	13.5795	14.7757
10	10.4622	10.9497	11.4639	12.0061	12.5779	13.1808	14.4866	15.9374	17.5487
11	11.5668	12.1687	12.8078	13.4864	14.2068	14.9716	16.6455	18.5312	20.6546
12	12.6825	13.4121	14.1920	15.0258	15.9171	16.8699	18.9771	21.3843	24.1331
13	13.8093	14.6803	15.6178	16.6268	17.7130	18.8821	21.4953	24.5227	28.0291
14	14.9474	15.9739	17.0863	18.2919	19.5986	21.0151	24.2149	27.9750	32.3926
15	16.0969	17.2934	18.5989	20.0236	21.5786	23.2760	27.1521	31.7725	37.2797
16	17.2579	18.6393	20.1569	21.8245	23.6575	25.6725	30.3243	35.9497	42.7533
17	18.4304	20.0121	21.7616	23.6975	25.8404	28.2129	33.7502	40.5447	48.8837
18	19.6148	21.4123	23.4144	25.6454	28.1324	30.9057	37.4502	45.5992	55.7497
19	20.8109	22.8406	25.1169	27.6712	30.5390	33.7600	41.4463	51.1591	63.4397
20	22.0190	24.2974	26.8704	29.7781	33.0660	36.7856	45.7620	57.2750	72.0524
21	23.2392	25.7833	28.6765	31.9692	35.7193	39.9927	50.4229	64.0025	81.6987
22	24.4716	27.2990	30.5368	34.2480	38.5052	43.3923	55.4568	71.4028	92.5026
23	25.7163	28.8450	32.4529	36.6179	41.4305	46.9958	60.8933	79.5430	104.6029
24	26.9735	30.4219	34.4265	39.0826	44.5020	50.8156	66.7648	88.4973	118.1552
25	28.2432	32.0303	36.4593	41.6459	47.7271	54.8645	73.1059	98.3471	133.3339
26	29.5256	33.6709	38.5530	44.3117	51.1135	59.1564	79.9544	109.1818	150.3339
27	30.8209	35.3443	40.7096	47.0842	54.6691	63.7058	87.3508	121.0999	169.3740
28	32.1291	37.0512	42.9309	49.9676	58.4026	68.5281	95.3388	134.2099	190.6989
29	33.4504	38.7922	45.2189	52.9663	62.3227	73.6398	103.9659	148.6309	214.5828
30	34.7849	40.5681	47.5754	56.0849	66.4389	79.0582	113.2832	164.4940	241.3327