Growing Annuity Calculator
Calculate the future value or present value of a payment stream that grows at a constant rate.
Growing Annuity Result
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Run the calculation to see the annuity value.
Quick Answer
A growing annuity is a stream of payments that increases by a constant growth rate each period. The calculator can return either the future value or the present value.
How to Calculate Growing Annuity
- Choose future value or present value.
- Enter the first payment, interest rate, growth rate, and periods.
- Click Calculate.
- Review the annuity value and the implied final payment.
Formula
Future value = P x [((1 + r)^n - (1 + g)^n) / (r - g)]
Present value = P x [1 - ((1 + g) / (1 + r))^n] / (r - g)
Special case when r = g uses a simplified expression.
Worked Examples
Example 1: A 1,000 first payment, 7 percent discount rate, 3 percent growth, and 10 periods produces a positive future value.
Example 2: When the growth rate gets closer to the discount rate, the annuity becomes more valuable.
Example 3: If the discount rate is below the growth rate, the value can increase very quickly.
How to Interpret Your Results
| Result | Meaning | Action |
|---|---|---|
| Low value | The payment stream is worth less in today's money | Check whether the growth rate is realistic |
| Moderate value | The annuity has a reasonable present or future value | Compare with a flat annuity or other investment |
| High value | The growth pattern creates a large expected value | Verify that the payment growth can really continue |
Frequently Asked Questions
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Detail About Growing Annuity Calculator
This page helps you value a payment stream that grows over time, which is common in investing, pension planning, and long-term cash flow analysis.
References
- OmniCalculator reference page
- Growing annuities are used in discounted cash flow analysis and investment planning.
- Last reviewed: March 2026.