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annuity.lcdoc
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62 lines (39 loc) · 1.45 KB
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Name: annuity
Type: function
Syntax: annuity(<interestRate>, <numberOfPeriods>)
Summary:
Computes the <value> of an annuity given an interest rate and a number
of payments.
Introduced: 1.0
OS: mac, windows, linux, ios, android
Platforms: desktop, server, mobile
Example:
annuity(.08,10)
Example:
annuity(currentAnnualRate/12,monthsOfLoan)
Parameters:
interestRate:
A positive number. The interestRate is expressed as a fraction of 1 so,
for example, an 8% rate is written .08.
numberOfPeriods:
A positive number.
Returns:
The <annuity> <function> <return|returns> a positive number.
Description:
Use the <annuity> <function> to calculate the present or future value of
an annuity or to calculate loan payments.
The formula for the value of an ordinary annuity is
(1 - (1 + <interestRate>)^(- <numberOfPeriods>))/ <interestRate>
The <annuity> <function> calculates this <value>.
The <numberOfPeriods> and the <interestRate> must use the same unit of
time. For example, if the periods are months, the interest rate is the
interest per month.
You can use the <annuity> <function> to calculate the amount of loan
payments as follows:
paymentAmount = totalAmount/annuity(rate,periods)
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
2500/annuity(.02,12) or $236.40.
References: function (control structure), compound (function),
value (function), return (glossary)
Tags: math