Language: Matlab
Present Value of an Annuity Retirees often purchase an annuity to give them stable income for a number of years. In this type of investment, the recipient gives the provide usually an insurance company feed sum and receives equal payments for a specified number of years. The present value of an annuity is the lumpsum amount that is deemed to be economically equivalent to the annual payments, assuming a certaintate of interest. For e mple, if the annuity pays $1,000 year for 20 years, the present value would be something LESS than $20,000, because money received in the future is valued less than money received today The present value is defined as follows: PVA + + ) where is the amount of the annual payments and is the interest rate expressed as a fraction. (So if the interest rate is 10 0 .10) or in more compact notation PV = Where is the number of years over which the annuity pays out W e a function to calculate the present value of an annuity, given the interest rates a percentage the number of years and the annual payment. You should be able to do this with array operations and buin functions without using a loop Function specifications: Funcioname: present value Input arguments payment (salar) - the amount of money received each year rescatar) - the anual interest rate as a percentage: years (scalar). period of the investment in years Output argument: PV (scatar). the present value Present Value of an Annuity Retirees often purchase an annuity to give them stable income for a number of years. In this type of investment, the recipient gives the provider (usually an insurance company) a fored and receives equal payments for a specified number of years. The present value of an annuity is the lump-sum amount that is deemed to be economically equivalent to the annual payments, assuming a certain rate of interest. For example, if the annuity pays $1,000 year for 20 years, the present value would be something LESS than $20,000, because money received in the future is valued less than money received today. The present value is defined as follows: PV - A + + ...) where A is the amount of the annual payments and is the interest rate expressed as a fraction. (So if the interest rate is 10 %, 0.10) or in more compact notation: PV = where n is the number of years over which the annuity pays out Write a function to calculate the present value of an annuity, given the interest rate as a percentage, the number of years, and the annual payment. You should be able to do this with a operations and built-in functions without using a loop, Function specifications: Function name: present value Input arguments payment scalar) - the amount of money received each year; rate (scalar) - the anual interest rate as a percentage: years (scalar) - period of the investment in years Output argument: PV (scalar) - the present value Function
