# Present Value of a Growing Annuity Calculator

## What does it do?

This present value of a growing annuity calculator works out the present value (PV) of a sum of money (Pmt) which is growing or declining at a constant rate (g) each period. The payments are made at the end of each period for n periods, and a discount rate i is applied.

## Formula

The calculator uses the present value of a growing annuity formula as shown below:

`PV = Pmt x (1 - (1 + g)n x (1 + i)-n ) / (i - g)`

## Instructions

The Excel present value of a growing annuity calculator, available for download below, is used to compute the present value by entering details relating to the regular payment, growth rate, discount rate and the number of periods. The calculator is used as follows:

### Step 1

Enter the regular payment amount (Pmt). The regular payment is the amount received at the end of each period for n periods. The amount must be the same for each period.

### Step 2

Enter the growth rate (g). The growth rate is the rate at which the original payment (Pmt) is growing each period. The rate should be for a period, so for example, if the period is a year, then the rate should be the yearly growth rate.

### Step 3

Enter the discount rate (i). The discount rate is the rate used to discount each payment amount back from the end of the period in which is was made, to the beginning of period 1 (today). The rate should be for a period, so for example, if the period is a year, then the rate should be the yearly rate.

### Step 4

Enter the number of periods (n). The number of periods is entered. A period can be any term (month, year etc), but must be consistent with the discount rate provided (see step 2).

### Step 5

The present value of a growing annuity calculator works out the present value (PV). The answer is the value today (beginning of period 1) of an a regular sum of money which is growing or declining at a constant rate (g), received at the end of each of n periods, and discounted at a rate of i. It is the present value of a growing annuity.

The present value of a growing annuity calculator is one type of tvm calculator used in time value of money calculations, discover another at the links below.

Notes and major health warnings
Users use this free annuity calculator at their own risk. We make no warranty or representation as to its accuracy and we are covered by the terms of our legal disclaimer, which you are deemed to have read. This is an example of a growing annuity future value calculator that you might use when considering how to calculate the future value of a growing annuity. It is purely illustrative of a future value of an annuity calculator. This is not intended to reflect general standards or targets for any particular business, company or sector. If you do spot a mistake in this future value growing annuity calculator, please let us know and we will try to fix it.
Present Value of a Growing Annuity Calculator November 6th, 2016

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