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

