Present Value of Growing Annuity Calculator
PV of payments that grow at rate g.
Inputs
$
%
%
Result
Present Value$12,250.04
About the Present Value of Growing Annuity Calculator
The Present Value of a Growing Annuity Calculator values a stream of periodic payments that grow at a constant rate each period — useful for valuing companies, dividend streams, or inflation-adjusted retirement income.
Calculation method
Closed-form growing-annuity formula, valid when the discount rate is not equal to the growth rate.
PV = PMT × (1 − ((1+g)/(1+r))^n) / (r − g)How to use this calculator
- Enter the first payment amount.
- Enter the discount rate and growth rate.
- Enter the number of payments.
Example
First payment of $10,000 growing 3% per year, discounted at 8%, for 20 years, has a PV of about $124,600.
Frequently asked questions
What if growth exceeds the discount rate?
For finite periods the formula still works; for perpetuities it does not — PV would be infinite, indicating unrealistic assumptions.
When would I use this?
Valuing a business's cash flows with expected growth, valuing rental income with rent escalation, or planning inflation-adjusted retirement withdrawals.
How is this different from a regular annuity?
A regular annuity pays a constant amount. A growing annuity's payments grow by a fixed percentage each period, matching many real-world cash flows.
Disclaimer: This calculator is for informational and educational purposes only and does not constitute financial, tax, or legal advice. Consult a qualified professional for decisions specific to your situation.