You can use MATLAB toeplitz function for this.
See the documentation by typing doc toeplitz on the command line.
Since your toeplitz matrix is symmetric you just need to define the first row, let's call it r and then use
Using the formula you have given it should be quite straight forward to assign r. In your formula just set i = 1 since you just want to define the first row, and then let j go from 1 to 500. So something like
i = 1;
jCol = 1:500
r = 1./(1 + abs(1 - jCol))
A = toeplitz(r)