Future Value of a Growing Annuity Due
A growing annuity whose payments arrive at the beginning of each period, accumulated to a future date.
FV of Growing Annuity Due
Future value of growing beginning-of-period payments.
When to use: Use when growing deposits are made at the start of each period.
Formula
Variables
| Symbol | Name | Description | Unit |
|---|---|---|---|
| FVA | Future Value of Annuity | Accumulated value | $ |
| PMT | First Payment | The first payment amount | $ |
| k | Interest Rate | Rate of return | % |
| g | Growth Rate | Payment growth rate | % |
| n | Number of Years | Number of periods | years |
Real-Life Examples
Example 1: Growing Savings Due
$4,000 first year, growing 2%/year, deposited at start of year, 7% return for 25 years.
Given
Step-by-Step
For these inputs, Future Value of Annuity is $324,152.36 under the stated payment, compounding and accounting assumptions.
Example 2: Growing Rent Invested
Rental income starts at $18,000/year, grows 3%/year, invested at start of year at 9% for 15 years.
Given
Step-by-Step
For these inputs, Future Value of Annuity is $681,636.42 under the stated payment, compounding and accounting assumptions.
Frequently Asked Questions
The annuity due version multiplies the result by (1 + k), reflecting the extra period of growth each beginning-of-period payment receives. This produces a higher future value compared to end-of-period payments.
Use it when you make increasing contributions at the start of each period — like beginning-of-year retirement deposits that grow annually with your salary. The formula captures both the payment growth and the early-deposit timing advantage.
The difference is the ordinary growing annuity FVA multiplied by the periodic rate. At typical rates (6-8%) over 20-30 years, beginning-of-period timing adds roughly 6-8% more to the final accumulated balance.