Calculate
Annuity  or Future Value of Regular Deposits
In
this
article we create a script to calculate
annuity or to find out the
future value
of a regular deposit.

You must provide the amount of each
deposit, the
number
of deposits per year, the number of years and the nominal interest rate.
Assuming
that interest is compounded with each deposit, the calculation is based
on the
following formula: 
where:
T = total value after Y
years (future value)
R = amount of regular deposits
N = number of deposits per year
Y = number of years
i = nominal interest rate
This
presentation shows you what we want to accomplish with an example.
Below the presentation, I give you the full code to implement in Matlab.
This is a suggested Matlab function or script to calculate the futurevalue formula above. You have four inputs and one output:
function t =
annuity(r, it, n, y)
it =
it/(n*100);
t = r *
((1 + it)^(n * y)  1)/it;
We can create another
script to test and run the above mfile:
clc;
clear; format bank
r =
input('Enter
amount of regular deposits: ');
it =
input('Enter
nominal interest rate: ');
n =
input('Enter
number of deposits per year: ');
y =
input('Enter
number of years: ');
future_value
= annuity(r, it, n, y)
Example
1:
$50 is
transferred each month from Monique’s checking account to a Math
Learning Club
savings account with 5% interest. How much will Monique receive at the
end of
the year?
We run
our test code and get:
Enter
amount of regular deposits: 50
Enter
nominal interest rate: 5
Enter
number of deposits per year: 12
Enter
number of years: 1
Our
result is:
future_value
= 613.94
Example
2:
Little
George makes annuity payments of $175. The interest is 5.5%. What
amount will
George have accumulated in 15 years?
Again,
we run our ‘Calculate Annuity’ code, and get:
Enter
amount of regular deposits: 175
Enter
nominal interest rate: 5.5
Enter
number of deposits per year: 1
Enter
number of years: 15
The
result is:
future_value
= 3921.5
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'Calculate Annuity' to home
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'Calculate Annuity' to 'Finance Formulas'
