<doc>

<legacy_id>1773</legacy_id>

<name>annuity</name>

<type>function</type>

<syntax>

<example>annuity(<i>interestRate</i>,<i>numberOfPeriods</i>)</example>

</syntax>

<library></library>

<objects>

</objects>

<synonyms>

</synonyms>

<classification>

<category>Math, Logic, &amp; Dates</category>

</classification>

<references>

<function tag="compound">compound Function</function>

</references>

<history>

<introduced version="1.0">Added.</introduced>

</history>

<platforms>

<mac/>

<windows/>

<linux/>

<ios/>

<android/>

</platforms>

<classes>

<desktop/>

<server/>

<web/>

<mobile/>

</classes>

<security>

</security>

<summary>Computes the <function tag="value">value</function> of an annuity given an interest rate and a number of payments.</summary>

<examples>

<example>annuity(.08,10)</example>

<example>annuity(currentAnnualRate/12,monthsOfLoan)</example>

</examples>

<description>

<p>Use the <b>annuity</b> <control_st tag="function">function</control_st> to calculate the present or future value of an annuity or to calculate loan payments.</p><p/><p><b>Parameters:</b></p><p>The <i>interestRate</i> is a positive number. The <i>interestRate</i> is expressed as a fraction of 1 so, for example, an 8% rate is written<code> .08</code>.</p><p/><p>The <i>numberOfPeriods</i> is a positive number.</p><p/><p><b>Value:</b></p><p>The <b>annuity</b> <control_st tag="function">function</control_st> <glossary tag="return">returns</glossary> a positive number.</p><p/><p><b>Comments:</b></p><p>The formula for the value of an ordinary annuity is</p><p> (1 - (1 + <i>interestRate</i>)^(-<i>numberOfPeriods</i>))/<i>interestRate</i></p><p>The <b>annuity</b> <control_st tag="function">function</control_st> calculates this <function tag="value">value</function>.</p><p/><p>The <i>numberOfPeriods</i> and the <i>interestRate</i> must use the same unit of time. For example, if the periods are months, the interest rate is the interest per month.</p><p/><p>You can use the <b>annuity</b> <control_st tag="function">function</control_st> to calculate the amount of loan payments as follows:</p><p/><p><code/> paymentAmount = totalAmount/annuity(rate,periods)</p><p/><p>For example, if the loan is for $2500 at an interest rate of 2% per month and is to be repaid in a year, the monthly payment is<code> 2500/annuity(.02,12) </code>or $236.40.</p>

</description>

</doc>