Present value of growing annuity is the calculation of present value of a series of cash flows that grow at a constant rate for each period / year.
The present value of a growing annuity is calculated using the following formula :
PVGA = [ P / ( r – g) ] * [ 1 – ( ( 1 + g ) / ( 1 + r ) ) n ]
PVGA = Present value of growing annuity ; P = First year payment ; g = growth rate ; r = Discount rate / rate of interest ; n = Number of years ;
In the calculator below insert the values of First year payment, growth rate, Discount rate and Number of years to arrive at the Present value of growing Annuity.