# Ordinary Annuity

Explanation

An ordinary annuity is an investment that usually lasts several years. Over these years the investor makes regular payments into the annuity. The early payments into the investment will have a longer time to earn interest than the later payments. After a length of time has passed, the ordinary annuity has a final value.

Formula symbols:

 S Final value of annuity R Amount of payment r Annual percentage rate (APR) k Interest periods per year i = r/k Percentage rate per interest period n Number of payments

Final value after n payments:

S = R(((1 + i)n - 1) / i)

Below is a calculator for the future value of an ordinary annuity.

Enter values below for the above formula. When this page loads the payment amount is \$500, the annual percentage rate (APR) is 5.0% (0.05), the payment period is monthly for 4 years.

(Example: For r enter 5.0% as 0.05, etc.)

R: r: k: n:

After entering values into the above input areas, click the following 'Calculate' button to get S, the final value of the annuity.

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