annuity

Computes the value of an annuity given an interest rate and a number of payments.

# Metadata

Platforms: desktop, server, mobile OS: mac, windows, linux, ios, android Introduced: 1.0 Security:

# Syntax

annuity(interestRate, numberOfPeriods)

# Params

- 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.

# Examples

annuity(.08,10)

annuity(currentAnnualRate/12,monthsOfLoan)

# 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.

If a math operation on finite inputs produces a non-finite output, an execution error is thrown. See math operations for more information.

# Tags

math,

# See

- **control structure:** function - **glossary:** return, math operation - **function:** compound, value