The future-value-of-money formula relates how much a current investment will be

Question

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.

Explanation / Answer

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

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.