Man Page compound.3m

NAME

     exp2, exp10, log2, compound, annuity  -  exponential,  loga-
     rithm, financial

SYNOPSIS

     cc [ flag ... ] file ...  -lsunmath -lm [ library ... ]

     #include <sunmath.h>

     double exp2(double x);

     double exp10(double x);

     double log2(double x);

     double compound(double r, double n);

     double annuity(double r, double n);

DESCRIPTION

     exp2() and exp10() return 2**x and 10**x respectively.

     log2() returns the logarithm to base 2.

     compound() and annuity() are functions important  in  finan-
     cial computations of the effect of interest at periodic rate
     r over n periods.  compound(r,n) computes (1+r)**n, the com-
     pound  interest  factor.  Given an initial principal P0, its
     value after n  periods  is  just  Pn  =  P0  *compound(r,n).
     annuity(r,n)  computes  (1 - (1+r)**-n)/r, the present value
     of annuity factor.   Given  an  initial  principal  P0,  the
     equivalent  periodic  payment is just p = P0 / annuity(r,n).
     compound() and annuity()  are  computed  using  log1p()  and
     expm1()  to  avoid gratuitous inaccuracy for small-magnitude
     r.  compound() and annuity() are not defined for r <= -1.

     Thus a principal amount P0 placed at 5% annual interest com-
     pounded quarterly for 30 years would yield

          P30 = P0 * compound(.05/4, 30.0 * 4)

     while a conventional fixed-rate 30-year home loan of  amount
     P0 at 10% annual interest would be amortized by monthly pay-
     ments in the amount

          p = P0 / annuity(.10/12, 30.0 * 12).

SEE ALSO

     exp(3M)