The future value of an annuity formula calculates the total amount of money that will accumulate over a series of regular payments, such as a loan. By rearranging the formula to solve for the payment amount, we can determine how much money needs to be paid each month to reach a desired future value. This calculation helps borrowers understand how much they will owe each month and plan their budget accordingly. Additionally, lenders can use this calculation to determine a payment schedule that suits both the borrower and the terms of the loan.
