Homework SourseThe futurevalueofmoney formula relates how much a current in
The future-value-of-money formula relates how much a current investment will be worth in the future, assuming a constant interest rate:
FV = PV * (1 + I)n
where
FV is the future value
PV is the present value or investment
I is the interest rate expressed as a fractional amount per compounding period—i.e., 5% is expressed as .05
N is the number of compounding periods.
(a) Create a MATLAB function called future_value with three inputs: the investment (present value), the interest rate expressed as a fraction, and the number of compounding periods.
(b) Use your function to determine the value of a $1000 investment in 10 years, assuming the interest rate is 0.5% per month, and the interest is compounded monthly.
Solution
b) FV=PV*(1+I)^n
here Pv=1000 and I=0.5 n=10
Future Value is: 11,303.29
| Current Principal: | $ | 1000 |
| Annual Addition: | $ | 1000 |
| Years to grow: | 10 | |
| Interest Rate: | %0.5 | |
| Compound interest time(s) annually 12(monthly) | ||
| Make additions at start end of each compounding period |
