Annuity Due Formula Excel Template

Prepared by Dheeraj Vaidya, CFA, FRM

dheeraj@wallstreetmojo.com

visit - www.wallstreetmojo.com
Stephan has deposited $1,000 at the start of the year and is planning to invest the same every year until 5 years.
The interest rate earn will be 5%. You are required to do the calculation of the future value of an annuity due.

Particulars Amount
Periodic Payment (P) $1,000
Number of period (n) 5
Rate of interest ( r) 5.00%

Future Value of Annuity Due $5,801.91

ry year until 5 years.
of an annuity due.
Mr. William wants to purchase a house after a couple of years. His target house value is $3,000,000. He decides to invest in
product where he can deposit yearly $600,000 starting at the beginning of each year until year 10. He wants to know what i
the present value of the annuity investment that he is doing. This would enable him to know what the true cost of the
property in today’s term is. You are required to do the calculation of the present value of the annuity due that Mr. William i
planning to make. Assume that rate earned on investment will be 12%.

Particulars Amount
Periodic Payment (P) $600,000
Number of period (n) 10
Rate of interest ( r) 12%
Frequency of interest 1

Present Value of Annuity Due $3,796,949.88

0,000. He decides to invest in a
r 10. He wants to know what is
what the true cost of the
annuity due that Mr. William is
Company X is a highly capital-intensive invested company. It imports most of the machinery from foreign countries as it is c
compared to buying from the local market. The company plans to set aside an amount of $118,909 semi-annually starting n
recent market trends, the average revenue earned on the investment is 8%. The company expects to fund the machinery aft
where they expect the value of the machinery to be $7,890,112. The company wants to know what the future value of the i
be, and will they be able to fund it or they would require funds in the form of a loan. You are required to do the calculation
value of the annuity investment done by the company and compute the amount of loan if the company requires it?

Particulars Amount
Investment amount per period (P) $118,909
Number of period (n) 15
Rate of interest ( r) 8%
Frequency of interest 2

Future Value of Annuity Due $6,935,764.02

m foreign countries as it is cheaper
09 semi-annually starting now. As per the
s to fund the machinery after 15 years
at the future value of the investment shall
uired to do the calculation of the future
mpany requires it?