Dated assumptions · transparent formulas
Growing Annuity Calculator
Calculate the future balance of payments that increase each year. Enter the first payment, annual payment growth, interest rate, and time horizon.
Educational calculator. Inputs stay in your browser. Historical ranges are not forecasts or investment advice.
Inputs
Estimate comparison
| Assumption | Rate | Nominal FV | Real FV |
|---|---|---|---|
| Lower growth estimateEditable planning assumption | 5.00% | $14,248.91 | Not requested |
| Middle growth estimateEditable planning assumption | 7.00% | $15,580.87 | Not requested |
| Higher growth estimateEditable planning assumption | 9.00% | $17,057.45 | Not requested |
Growth curve and yearly schedule
The same projection engine draws each estimate and feeds the collapsible year-by-year detail.
- Lower growth estimate
- Middle growth estimate
- Higher growth estimate
Show year-by-year detail
| Year | Opening | Deposits | Interest | Ending |
|---|---|---|---|---|
| 1 | $0.00 | $1,000.00 | $0.00 | $1,000.00 |
| 2 | $1,000.00 | $1,030.00 | $70.00 | $2,100.00 |
| 3 | $2,100.00 | $1,060.90 | $147.00 | $3,307.90 |
| 4 | $3,307.90 | $1,092.73 | $231.55 | $4,632.18 |
| 5 | $4,632.18 | $1,125.51 | $324.25 | $6,081.94 |
| 6 | $6,081.94 | $1,159.27 | $425.74 | $7,666.95 |
| 7 | $7,666.95 | $1,194.05 | $536.69 | $9,397.69 |
| 8 | $9,397.69 | $1,229.87 | $657.84 | $11,285.40 |
| 9 | $11,285.40 | $1,266.77 | $789.98 | $13,342.15 |
| 10 | $13,342.15 | $1,304.77 | $933.95 | $15,580.87 |
Rate assumptions and sources
Lower / Middle / Higher estimates · reviewed 2026-09-12
Scenario pages can initialize editable rates as rounded planning assumptions. The source cards below identify benchmark provenance; they do not imply that a scenario default is a live quote.
- Lower growth estimate
5.00%
Editable scenario input
Illustrative return; not a forecast or historical percentile.
- Middle growth estimate
7.00%
Editable scenario input
Illustrative return; not a forecast or historical percentile.
- Higher growth estimate
9.00%
Editable scenario input
Illustrative return; not a forecast or historical percentile.
- Inflation: 3.34%
- FRED: Consumer Price Index for All Urban Consumers (CPIAUCSL)
Compound annual change from August 2016 to August 2026; user input can replace it.
How a growing annuity differs from an ordinary annuity
A growing annuity increases the contribution over time instead of repeating one fixed amount. The first payment is the contribution input. The next year uses that payment multiplied by (1 + g), where g is annual payment growth.
Payment growth changes the money you add; the interest rate changes the return on money already invested. A 3% increase in deposits and a 7% return are separate assumptions. Neither rate is a forecast.
For monthly or biweekly contributions, this tool holds the payment fixed within each year and increases it at the start of the next year. It does not increase each individual monthly payment. Annual payments and annual compounding match the closed-form growing annuity formula below.
Growing annuity future value formula
For n end-of-year payments, FV = P × ((1 + r)^n − (1 + g)^n) / (r − g). P is the first payment, r is the effective annual return, g is annual payment growth, and n is the number of years. The first payment occurs at the end of year 1.
When r = g, use FV = P × n × (1 + r)^(n − 1). This avoids dividing by zero. For beginning-of-year payments, multiply by (1 + r). If an opening balance is entered, add PV × (1 + r)^n.
Set g = 0 to recover the ordinary annuity formula. For nonannual compounding, use an effective annual rate in the annual formula. Monthly contributions with annual step increases are evaluated deposit by deposit in the yearly schedule.
Worked example: $1,000 growing by 3% each year
Start with $0, make a $1,000 first payment at the end of year 1, grow annual payments by 3%, and assume a 7% annual return over 10 years. Annual compounding gives a future value of $15,580.87. Total payments are $11,463.88; the rest is projected interest.
The second payment is $1,030 and the tenth is $1,304.77. Beginning-of-year payments produce $16,671.54 under the same assumptions. If both interest and payment growth equal 3%, the end-of-year result is $13,047.73.
For $100 per month with the same 3% annual step increase and a 7% nominal rate compounded monthly, the tool increases monthly payments to $103 in year 2 and $106.09 in year 3. Inspect the yearly deposits to distinguish this schedule from a payment that grows every month.
Frequently asked questions
What happens when the interest rate equals payment growth?
The calculator still works. For annual end-of-year payments, use the equal-rate limit FV = P × n × (1 + r)^(n − 1); no division by r − g is needed.
Can payment growth be higher than the interest rate?
Yes. The formula remains valid when g is greater than r. Increasing contributions is not an investment return, so inspect total deposits as well as the ending balance.
Does the monthly payment grow every month?
No. Monthly payments stay constant within a year, then increase once each year by the annual payment growth input. Choose annual payments for a standard closed-form growing annuity example.