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Annuity calculator with inflation adjusted payments
Financial - Wealth
Tuesday, 12 February 2008 20:53

This calculator uses a variant of the future annuity formula that can also handle payments that increase with a certain yearly percentage. This formula describes the relation between a sequence of future indexed payments given the interest, the indexation percentage, the number of terms and the present value of the payments. The calculator can compute either the present value, or the number of terms, or the initial size of the terms or the interest or the indexation percentage given the other four quantities. So enter four fields, leave one field empty and compute that field.

This kind of computations occur for example with pensions, alimentation and life insurances, etc. See also the following examples:

Present value:
Interest Rate (%):
Initial term amount:
per
Number of terms:
Indexation terms (%):
Computed value:
.

If the length of the periods is unequal to a year than the computed values are approximations rather than exact. The approximations get better for lower interest rates. In addition the calculation requires that the indexation must be less than the interest.