Understanding FVA with constant and uneven cash flows

This page provides definition, example, calculation, and a calculator for FVA or Future Value of Annuities with constant and uneven cash flows. Don't waste time with MS Excel templates - we are sure, here you will find all you need!

How do you define FVA?

The future value of annuity is found as the sum of future values of individual cash flows of the stream

Annuities with uneven cash flows

Usually we have annuities with constant stream of equal payment yet in good number of circumstances we are required to pay or deposit uneven amount of payments

Formula for FVA with uneven cash flows?

Example of FVA with uneven cash flows

Let us examine finding Future Value of annuity or FVA with an example investment proposal. Let us say we were offered a series of cash inflows at the end of each of the next four years as $5,000, $4,000, $3,000, and $1,000. And the discount rate is 12%.

FVA Calculation @ 12%

Years T	Payment	FVIF_N-T @ 12%	FUTURE VALUE
FVA at 12%
1	5000	1.405	$7,025
2	4000	1.254	$5,016
3	3000	1.120	$3,360
4	1000	1.000	$1,000
		FVA	$16,401

Annuities with constant cash flows

Most annuities require a series of periodic payment in same amount over a period of time. This is the most common type of annuity with constant cash flows.

Formula for FVA with constant cash flows?

Example of FVA with constant cash flows

Let us examine finding Future Value of annuity or FVA with an example investment proposal. Let us say we were offered a series of cash inflows at the end of each of the next four years in the amount of $10,000. And the discount rate or return is 10%.

FVA Calculation @ 10%

	Payment	FVIFA @ 10%	FVA
FVA at 10% for 4 years
	10000	4.641	$46,410