Growing Annuity Payment using Future Value Solution

STEP 0: Pre-Calculation Summary
Formula Used
Initial Payment = (Future Value*(Rate per Period-Growth Rate))/(((1+Rate per Period)^(Number of Periods))-((1+Growth Rate)^(Number of Periods)))
PMTinitial = (FV*(r-g))/(((1+r)^(nPeriods))-((1+g)^(nPeriods)))
This formula uses 5 Variables
Variables Used
Initial Payment - Initial Payment refers to the first installment or upfront amount paid at the beginning of a financial transaction or contract.
Future Value - Future Value is the calculated future value of any investment.
Rate per Period - The Rate per Period is the interest rate charged.
Growth Rate - Growth Rate refer to the percentage change of a specific variable within a specific time period, given a certain context.
Number of Periods - The Number of Periods is the periods on an annuity using the present value, periodic payment, and periodic rate.
STEP 1: Convert Input(s) to Base Unit
Future Value: 33000 --> No Conversion Required
Rate per Period: 0.05 --> No Conversion Required
Growth Rate: 0.02 --> No Conversion Required
Number of Periods: 2 --> No Conversion Required
STEP 2: Evaluate Formula
Substituting Input Values in Formula
PMTinitial = (FV*(r-g))/(((1+r)^(nPeriods))-((1+g)^(nPeriods))) --> (33000*(0.05-0.02))/(((1+0.05)^(2))-((1+0.02)^(2)))
Evaluating ... ...
PMTinitial = 15942.0289855072
STEP 3: Convert Result to Output's Unit
15942.0289855072 --> No Conversion Required
FINAL ANSWER
15942.0289855072 15942.03 <-- Initial Payment
(Calculation completed in 00.004 seconds)

Credits

Created by Keerthika Bathula
Indian Institute of Technology, Indian School of mines, Dhanbad (IIT ISM Dhanbad), Dhanbad
Keerthika Bathula has created this Calculator and 50+ more calculators!
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14 Future value Calculators

Future Value of Growing Annuity
Go Future Value of Growing Annuity = Initial Investment*((1+Rate per Period)^(Number of Periods)-(1+Growth Rate)^(Number of Periods))/(Rate per Period-Growth Rate)
Growing Annuity Payment using Future Value
Go Initial Payment = (Future Value*(Rate per Period-Growth Rate))/(((1+Rate per Period)^(Number of Periods))-((1+Growth Rate)^(Number of Periods)))
Number of Periods using Future Value
Go Number of Periods = ln(1+((Future Value of Annuity*Rate per Period)/Cashflow per Period))/ln(1+Rate per Period)
Annuity Due for Future Value
Go Annuity Due Future Value = Payment made in Each Period*((1+Rate per Period)^(Number of Periods)-1)/(Rate per Period)*(1+Rate per Period)
Future Value of Present Sum given Compounding Periods
Go Future Value = Present Value*(1+((Rate of Return*0.01)/Compounding Periods))^(Compounding Periods*Number of Periods)
Future Value of Annuity with Continuous Compounding
Go FV of Annuity with Continuous Compounding = Cashflow per Period*((e^(Rate per Period*Number of Periods)-1)/(e^(Rate per Period)-1))
Future Value of Ordinary Annuities and Sinking Funds
Go Future Value of Ordinary Annuity = Cashflow per Period*((1+Rate per Period)^(Total Number of Times Compounded)-1)/Rate per Period
Future Value of Annuity
Go Future Value of Annuity = (Monthly Payment/(Interest Rate*0.01))*((1+(Interest Rate*0.01))^Number of Periods-1)
Future Value with Continuous Compounding
Go Future Value with Continuous Compounding = Present Value*(e^(Rate of Return*Number of Compounding Periods*0.01))
Future Value of Present Sum given Number of Periods
Go Future Value = Present Value*exp(Rate of Return*Number of Periods*0.01)
Future Value of Lumpsum
Go Future Value of Lumpsum = Present Value*(1+Interest Rate per Period)^Number of Periods
Annuity Payment using Future Value
Go Annuity Payment = Future Value of Annuity/(((1+Rate per Period)^Number of Periods)-1)
Future Value of Present Sum given Total Number of Periods
Go Future Value = Present Value*(1+(Rate of Return*0.01))^Number of Periods
Future Value Factor
Go Future Value Factor = (1+Rate per Period)^Number of Periods

Growing Annuity Payment using Future Value Formula

Initial Payment = (Future Value*(Rate per Period-Growth Rate))/(((1+Rate per Period)^(Number of Periods))-((1+Growth Rate)^(Number of Periods)))
PMTinitial = (FV*(r-g))/(((1+r)^(nPeriods))-((1+g)^(nPeriods)))

What is Growing Annuity Payment using Future Value ?

A growing annuity payment using future value refers to a series of periodic payments that increase over time and are compounded to reach a specified future value, accounting for growth or inflation. This concept is crucial in financial planning, especially for long-term investments or retirement savings, as it considers the increasing value of money over time due to factors like interest or growth rates. By understanding the growing annuity payment using future value, individuals and businesses can make strategic decisions regarding their financial goals, ensuring that their savings or investment contributions align with their desired future outcomes while adjusting for the effects of inflation or growth.

How to Calculate Growing Annuity Payment using Future Value?

Growing Annuity Payment using Future Value calculator uses Initial Payment = (Future Value*(Rate per Period-Growth Rate))/(((1+Rate per Period)^(Number of Periods))-((1+Growth Rate)^(Number of Periods))) to calculate the Initial Payment, The Growing Annuity Payment using Future Value represents a series of increasing cash flows at specified intervals, compounded to a future point in time. Initial Payment is denoted by PMTinitial symbol.

How to calculate Growing Annuity Payment using Future Value using this online calculator? To use this online calculator for Growing Annuity Payment using Future Value, enter Future Value (FV), Rate per Period (r), Growth Rate (g) & Number of Periods (nPeriods) and hit the calculate button. Here is how the Growing Annuity Payment using Future Value calculation can be explained with given input values -> 15942.03 = (33000*(0.05-0.02))/(((1+0.05)^(2))-((1+0.02)^(2))).

FAQ

What is Growing Annuity Payment using Future Value?
The Growing Annuity Payment using Future Value represents a series of increasing cash flows at specified intervals, compounded to a future point in time and is represented as PMTinitial = (FV*(r-g))/(((1+r)^(nPeriods))-((1+g)^(nPeriods))) or Initial Payment = (Future Value*(Rate per Period-Growth Rate))/(((1+Rate per Period)^(Number of Periods))-((1+Growth Rate)^(Number of Periods))). Future Value is the calculated future value of any investment, The Rate per Period is the interest rate charged, Growth Rate refer to the percentage change of a specific variable within a specific time period, given a certain context & The Number of Periods is the periods on an annuity using the present value, periodic payment, and periodic rate.
How to calculate Growing Annuity Payment using Future Value?
The Growing Annuity Payment using Future Value represents a series of increasing cash flows at specified intervals, compounded to a future point in time is calculated using Initial Payment = (Future Value*(Rate per Period-Growth Rate))/(((1+Rate per Period)^(Number of Periods))-((1+Growth Rate)^(Number of Periods))). To calculate Growing Annuity Payment using Future Value, you need Future Value (FV), Rate per Period (r), Growth Rate (g) & Number of Periods (nPeriods). With our tool, you need to enter the respective value for Future Value, Rate per Period, Growth Rate & Number of Periods and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.
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