Financial Toolbox |
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Annuities
Several toolbox functions deal with annuities. This first example shows how to compute the interest rate associated with a series of loan payments when only the payment amounts and principal are known. For a loan whose original value was $5000.00 and which was paid back monthly over four years at $130.00/month
Rate = annurate(4*12, 130, 5000, 0, 0)
The function returns a rate of 0.0094 monthly, or approximately 11.28% annually.
The next example uses a present-value function to show how to compute the initial principal when the payment and rate are known. For a loan paid at $300.00/month over four years at 11% annual interest
Principal = pvfix(0.11/12, 4*12, 300, 0, 0)
The function returns the original principal value of $11,607.43.
The final example computes an amortization schedule for a loan or annuity. The original value was $5000.00 and was paid back over 12 months at an annual rate of 9%.
[Prpmt, Intpmt, Balance, Payment] = ...
amortize(0.09/12, 12, 5000, 0, 0);
This function returns vectors containing the amount of principal paid,
Prpmt = [402.76 405.78 408.82 411.89 414.97 418.09
421.22 424.38 427.56 430.77 434.00 437.26]
the amount of interest paid,
Intpmt = [34.50 31.48 28.44 25.37 22.28 19.17
16.03 12.88 9.69 6.49 3.26 0.00]
the remaining balance for each period of the loan,
Balance = [4600.24 4197.49 3791.71 3382.89 2971.01
2556.03 2137.94 1716.72 1292.34 864.77
434.00 0.00]
and a scalar for the monthly payment.
Payment = 437.26
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