Streams of Cash Flows

Future Value of an Annuity

Regular end-of-period deposits accumulate through geometric compounding.

highlighted = computed this step

Annuity future value

An ordinary annuity makes one equal payment at the end of each period. Here each deposit is $1,000.00.

FV=A⋅(1+r)3−1r=$3,310.00\text{FV}=A\cdot\frac{(1+r)^{3}-1}{r}=\$3,310.00
Future value of annuityThree equal deposits at period ends make one lump sum. 0123$1,000.00$1,000.00$1,000.00

Three deposits

With 3 deposits at 10%, the future value is $3,310.00.

$3,310.00 (3 deposits of $1,000.00)\$3,310.00\text{ (3 deposits of }\$1,000.00\text{)}
Future value of annuityThree equal deposits at period ends make one lump sum. 0123$1,000.00$1,000.00$1,000.00

Rounding and assumptions

Round-half-up to the cent is used for displayed values. Institutions and regulations may use different rules (for example, banker's rounding or round-half-to-even).

$3,310.00\$3,310.00