Whether a series of payments lands at the start or the end of each period changes its future value, since a start-of-period payment gets one extra period of compounding.
How it works
The standard future-value-of-an-annuity formula gives the ordinary (end-of-period) result; multiplying that by (1 + rate) gives the annuity-due (start-of-period) result.
What this does not include
This assumes level payments and a fixed rate for the full term — it does not model varying payment amounts or rate changes partway through.
How to use this calculator
- Enter the payment amount, annual rate, and number of periods.
A worked example
$1,000 payments, 6% annual rate, 10 periods: ordinary annuity future value = $13,180.79, annuity due future value = $13,971.64 — a $790.85 difference, since annuity-due payments happen at the start of each period and earn one extra period of interest.
The same payments at 0% interest: both future values equal exactly $10,000, with zero difference — timing only matters when interest is actually accruing.
What the variables mean
| Variable | Meaning |
|---|---|
| Payment | Regular payment amount |
| Annual rate | Interest rate earned |
| Periods | Number of payment periods |
Edge cases worth knowing
An annuity due (payments at the start of each period) always has a higher future value than an ordinary annuity (payments at the end) — every payment gets one extra compounding period, as the second example above shows collapsing to zero difference only when there’s no interest to compound.
A payment of zero makes the comparison meaningless, so the calculator declines to show a result without one.
Frequently asked questions
Which real-world payments are annuities due?
Leases and insurance premiums are typically paid at the start of the period; rent and loan payments are more commonly ordinary annuities paid at the end.
Does the timing difference matter much?
It grows with the interest rate and payment size — over 10 years at 6% it’s about a 6% higher future value for the annuity due, purely from one extra compounding period per payment.
Does this apply to loan payments too?
Yes, in reverse — a loan payment due at the start of each period (rare, but it happens) accrues slightly less total interest than the same payment due at the end.
