Investment
Future value of an ordinary annuity (end of period)
The standard form. Contributions are made at the end of each period, so the final contribution earns no interest at all.
The Formula
FV = PMT x (((1 + r)^n - 1) / r)
The standard form. Contributions are made at the end of each period, so the final contribution earns no interest at all.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| PMT | Contribution per period | currency | Assumed equal every period and never skipped. |
| r | Interest rate per period | decimal | As a decimal, matched to the contribution frequency: monthly deposits use an annual rate divided by 12. |
| n | Number of contributions | count | Total count, expressed in the same unit as r. |
What Each Symbol Means
PMTcurrency
Contribution per period
Assumed equal every period and never skipped.
rdecimal
Interest rate per period
As a decimal, matched to the contribution frequency: monthly deposits use an annual rate divided by 12.
ncount
Number of contributions
Total count, expressed in the same unit as r.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate future value page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Future Value, filed under Finance. Every number the guide produces comes from substituting into this one line.