Save the same amount every month for years and two engines build your balance: your payments, and the interest those payments earn once invested. This Future Value of Annuity Calculator prices the pair together — enter the payment, the annual rate, the years and how often you pay, and it returns the future value, your total contributions, and the interest compounding contributed on top.
Worked Example: $200 a Month for 10 Years at 6%
Two hundred dollars a month, a 6% annual rate compounded monthly (0.5% per month), for 120 months, grows to $32,775.87. Your contributions total 200 × 120 = $24,000, so compounding added $8,775.87 — more than a third of the final balance arrived as interest, not effort. Flip the timing to “start of period” (an annuity due, like rent or a lease) and each payment earns one extra month of interest: the balance becomes $32,939.75. Extend the same plan to 20 years and the future value roughly doubles-plus to about $92,400, of which contributions are only $48,000 — the interest share keeps climbing with time, which is the quantitative version of “start early.”
The Formula and Why It Looks Like That
For payment PMT, per-period rate r and n periods, FV = PMT × [((1 + r)ⁿ − 1) / r]. The bracket is a geometric series in disguise: the last payment earns no interest (it lands at the end), the one before earns one period, and so on back to the first payment, which compounds for n − 1 periods; summing those growths and factoring out PMT produces exactly the bracket. Two limits sanity-check it: as r → 0 the bracket tends to n, so FV → PMT × n — with no interest you just stack the payments, as you must. And the annuity-due version multiplies the ordinary result by (1 + r), one extra period of growth on every payment. If a starting balance joins the payments, grow it separately at (1 + r)ⁿ and add — lump sums and annuities superpose, which is how the millionaire calculator on this site combines an existing pot with monthly contributions.
Where This Calculation Runs Your Life
Retirement contributions are this formula wearing a payroll costume: a monthly 401(k) deferral at an assumed market return is an annuity future value, and the employer’s match is a second, free annuity stacked on top. Sinking funds — saving for a roof, a car, a tax bill — are the same computation run toward a target date. Insurance and pension pricing invert it: the insurer computes what your payment stream will be worth (this page) or what a promised stream is worth today (its present-value sibling) and prices accordingly. Even lottery and settlement offers decompose this way. Anywhere identical payments repeat on a schedule, the geometric-series bracket is quietly doing the arithmetic — this page simply lets you drive it yourself.
Common Mistakes
Feeding the annual rate where the formula wants the per-period rate — with monthly payments, divide by 12, as the calculator does. Mixing timing conventions: payments at the start of each period (annuity due) are worth one extra period of interest, and using the ordinary formula for rent-style payments understates the value. Forgetting that the result assumes the rate never changes and payments never skip — a plan, not a prophecy. And comparing future values across different horizons without noticing that time, not the payment size, is usually the strongest lever in the bracket.
A Quarterly Example, and the Payment-Frequency Effect
The same saver paying quarterly instead of monthly — $500 a quarter at an 8% annual rate (2% per quarter) for 5 years, 20 payments — reaches $12,148.68: contributions of $10,000 plus $2,148.68 of interest. Compare a monthly twin paying about $166.67 for the same 5 years at the same nominal rate: slightly more interest, because each payment starts compounding sooner on average. The lesson generalizes: at a fixed total outlay, more frequent payments end slightly ahead, and lump-sum-earlier beats both — the timing of money inside the plan matters at the margins, while the rate, the payment size and above all the number of periods matter at the core. When an employer or a plan document quotes you a future balance, this frequency detail is one of the first assumptions worth checking after the rate itself.
Related Tools
Continue with the Present Value of Annuity Calculator, the Millionaire Calculator, the Pay Raise Calculator, or browse the full Finance Calculators hub.
Frequently Asked Questions
What is the future value of $200 a month for 10 years at 6%?
$32,775.87 with end-of-month payments. You contribute $24,000; compounding adds $8,775.87. Paying at the start of each month instead raises it to $32,939.75.
What is the future value of an annuity formula?
FV = PMT × [((1 + r)ⁿ − 1) / r], with r the per-period rate and n the number of payments. The bracket sums the growth of every individual payment.
What is the difference between an ordinary annuity and an annuity due?
Timing: ordinary annuity payments land at the end of each period; annuity-due payments at the start. The due version is worth exactly one extra period of interest — multiply by (1 + r).
Why does interest outgrow contributions over long horizons?
Contributions grow linearly (n × PMT) while each payment compounds exponentially for its remaining life. The crossover is inevitable given enough periods — at 6% monthly, interest overtakes contributions somewhere in the plan’s third decade.
Can I include an existing balance?
Grow it on its own — balance × (1 + r)ⁿ — and add the annuity result. The two pieces never interact in the math, so any lump-plus-stream plan is just the sum of its parts.
Is the future value what I will actually have?
It is what the assumptions produce: constant rate, payments on schedule, no taxes or fees. Real returns vary year to year, so treat the number as the plan’s center of gravity, not a guarantee.