# Present Value of Growing Annuity Calculator

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#### Compare multiple scenarios in one set of results.

Each set of calculation during visit will be saved in this results area.

Present Value of Growing Annuity (PVGA) represents the current equivalent amount of growing future payments for a specific interest rate and a number of periods the interest is compounding. Present Value can be calculated for an ordinary annuity (paid at the end of period) or for an annuity due (paid at the beginning of period).

Present Value of Growing Ordinary Annuity formula (PVGOA) is:

a) Interest Rate ≠ Growing Rate

 $Present Value of Growing Ordinary Annuity formula$

b) Interest Rate = Growing Rate

 $Present Value of Growing Ordinary Annuity formula$

Present Value of Growing Annuity Due formula (PVGAD) is:

 $Present Value of Growing Annuity Due formula$

Important notes:

• The time frame (year, month, quarter etc.) must be the same for both, 'Interest Rate' and 'Number of Time Periods';
• This model assumes that the Interest Rates stay the same the entire period;
• This model assumes that Payments are growing by the same rate the entire period;
• This model uses compound interest method.

This Present Value of Growing Annuity calculator allows you to accomplish the following:

• Determine the current equivalent amount of growing future payments given a specific growing rate, a specific interest rate and a number of periods the interest is compounding;
• Compare multiple scenarios, by showing each case in the results section.

Present Value of Growing Annuity calculator is part of the Time Value of Money calculators, complements of our consulting team.

1. Complementarily, in order to calculate the Present Value of Growing Annuity, we offer a calculator free of charge.
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3. Although C. C. D. Consultants Inc.'s personnel has verified and validated the Present Value of Growing Annuity calculator, C. C. D. Consultants Inc. is not responsible for any outcome derived from its use. The use of Present Value of Growing Annuity calculator is the sole responsibility of the user and the outcome is not meant to be used for legal, tax, or investment advice.

### Definitions and terms used in Present Value of Growing Annuity Calculator

Payment Amount
The amount expected to receive or pay each time period.
Payment Growing Rate Per Period
The rate at which the payment changes each time period, expressed as a percentage.
Interest Rate Per Period
The rate at which the interest for the use of money is charged or paid. Usually, the interest rate is expressed as a percentage and noted on annual basis.
Number of Time Periods
The number of time the interest is compounded (year, month, quarter etc.) and must have the same time frame as 'Interest Rate Per Period'.
Compound interest
The interest that increases exponentially over time periods. The interest earning interest.
Annuity
Structured schedule of payments of the same amount at regular time intervals.
Ordinary Annuity
The annuity payments are made at the end of each period.
Annuity Due
The annuity payments are made at the beginning of each period.

### Present Value of Growing Annuity Examples

Example 1:

You invest 5,000.00 for 25 years at the beginning of each year. Every year you increase (adjust) the invested amount by 3%. How much the investment is worth today at 5.25% annual interest rate compounded annually?

Payment Amount = 5,000

Payment Growing Rate Per Period = 3.00%

Interest Rate Per Period = 5.25%

Number of Time Periods = 25

Annuity Type: Due (Beginning)

If you were to continually invest, starting with 5,000.00 and increasing it by 3 % every time period (month, quarter, year, etc.) at the beginning of time period, at a rate of 5.25 % per time period, you would receive 350,836.00 after 25 time periods, which is worth 97,622.86 today.

Example 2:

You invest 5,000.00 for 25 years at the end of each year. Every year you increase (adjust) the invested amount by 3%. How much the investment is worth today at 5.25% annual interest rate compounded annually?

Payment Amount = 5,000

Payment Growing Rate Per Period = 3.00%

Interest Rate Per Period = 5.25%

Number of Time Periods = 25

Annuity Type: Ordinary (End)