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HOSTING A TOTAL OF 318 FORMULAS WITH CALCULATORS

Growing Annuity Payment For Future Value

The growing annuity payment formula using future value is used to calculate the first cash flow or payment of a series of cash flows that grow at a proportionate rate. A growing annuity may sometimes be referred to as an increasing annuity.

A few important things to note is that the growing annuity payment formula using future value shown calculates only the initial payment or cash flow. Each following cash flow from the first must be calculated separately.

Another important issue to consider is that the formula used here is specifically used when the future value of the growing annuity is known. Determining whether to use the growing annuity payment formula for future value or to use the fgrowing annuity payment formula for present value depends on if the balance of the annuity is increasing or decreasing.

f{r-g [1+r] n-[1+g] n}

Here F=future value,r=rate per period,g=growth rate,n=number of periods.

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