Find the future value of a series of equal, regular payments.
Modelled as a monthly annuity, using the same maths behind a SIP calculation.
Future value: Same annuity formula used for SIP
In finance, an annuity is any stream of equal payments at regular intervals. A recurring deposit, a SIP, an insurance premium and a pension are all annuities. This calculator finds the future value of an annuity you pay into: how much a series of regular contributions grows to at a given annual return.
It models the payments as monthly, using the same annuity-due maths as a SIP, where each instalment is invested at the start of its month. The amount you enter as the regular payment is treated as a yearly total and split into twelve equal monthly instalments. So ₹60,000 means ₹5,000 a month.
It suits anyone planning regular saving for a goal, or comparing the growth of a premium-based plan with investing the same money elsewhere.
1. Note the yearly payment A, the annual return R% and the number of years N.
2. Find the monthly instalment: P = A ÷ 12.
3. Find the monthly rate i = R ÷ 1200 and the number of payments n = 12N.
4. Future value of an annuity due: FV = P × [((1 + i)ⁿ − 1) ÷ i] × (1 + i).
5. Total paid in = P × n, which equals A × N.
6. Growth earned = FV − total paid in.
If payments are made at the end of each period, the future value is P × ((1 + i)ⁿ − 1) ÷ i. This is called an ordinary annuity, and it is how loan EMIs are usually treated. If payments are made at the start, each one earns one extra period of return, so the future value is multiplied by (1 + i). That is an annuity due, and it is how SIPs are usually modelled. This calculator uses the annuity-due form. The difference is small for monthly payments but worth knowing when comparing results from different tools.
The first payment grows for n periods, the next for n − 1, and so on. Adding P(1 + i)ⁿ + P(1 + i)ⁿ⁻¹ + … + P(1 + i) gives a geometric series. Its sum is P(1 + i) × ((1 + i)ⁿ − 1) ÷ i. The factor ((1 + i)ⁿ − 1) ÷ i is often called the annuity factor. Once you know it for a rate and period, multiplying by any payment gives the future value, which is why tables of these factors were widely used before calculators.
This calculator covers the accumulation side, where you pay in and money builds up. A pension annuity from an insurer is the payout side: you hand over a lump sum and receive fixed payments for life or a set term. That uses the present value of an annuity, PV = P × (1 − (1 + i)⁻ⁿ) ÷ i, which is a different calculation. The two are linked; the corpus you build here is what can later buy a payout annuity.
Deepa sets aside ₹60,000 a year, paid in as equal monthly amounts, into a fund she expects to return 7.5% a year for 20 years.
Answer: Future value of the annuity ₹27,85,958; Total paid in ₹12,00,000; Growth earned ₹15,85,958
Entering a monthly amount; this calculator divides the payment you enter by 12, so enter the yearly total.
Mixing ordinary annuity and annuity due results from different calculators.
Confusing the future value of contributions with the income a pension annuity will pay.
Using a nominal rate and forgetting that the future value is in future rupees.
Assuming the payments or rate stay unchanged for decades without revisiting the plan.
Estimating the value of regular yearly savings spread over the months.
Comparing a premium-based savings plan with investing the same premiums in a fund.
Understanding the maths behind SIPs, RDs and pension contributions.
Teaching the time value of money in commerce and finance courses.
Is an annuity the same as a SIP?
In maths, yes — both describe a series of equal payments made regularly, that grow over time. 'Annuity' is just the more general financial term for this.