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 provides an insurance company afred sum 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 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 = A where 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 array 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 ( Output argument PV (scalar) - the present value ar) period of the investment in years