1. What is Simple Annuity Future Value?

The Simple Annuity Future Value calculates the total value of a series of equal payments at simple interest. It's used for financial planning when interest is not compounded.

2. How Does the Calculator Work?

The calculator uses the simple annuity formula:

Where:

• \( FV \) — Future Value (total accumulated amount)
• \( PMT \) — Regular payment amount
• \( n \) — Number of payment periods

Explanation: This formula assumes simple interest where each payment earns the same interest amount each period.

3. Importance of Future Value Calculation

Details: Calculating future value helps in financial planning, retirement savings estimation, and comparing different investment options.

4. Using the Calculator

Tips: Enter the regular payment amount and number of periods. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between simple and compound interest annuity?
A: Simple interest calculates interest only on principal, while compound interest calculates interest on both principal and accumulated interest.

Q2: When is simple interest typically used?
A: Simple interest is often used for short-term loans or investments, and in some government securities.

Q3: How does payment frequency affect the calculation?
A: For simple interest, payment frequency doesn't affect the total interest earned - only the total number of periods matters.

Q4: What are limitations of simple interest calculations?
A: They don't account for the time value of money as accurately as compound interest calculations.

Q5: Can this calculator be used for loans?
A: Yes, it can calculate the total repayment amount for simple interest loans.