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The future-value-of-money formula relates how much a current investment will be worth in the future, assuming a constant interest rate.
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.
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