I don't know what kind of animation you are looking for, but something quick and simple would be to insert a pause after every plot call. In this case, you might want to set the x and y axis limits after the first plot, so you get the full picture from the get go. I dont know if this is what you're after?
% A cylindrical tank has a capacity of 100 bottles.
% Created six rectangles within the 3.5 ft by 6 ft tank.
figure
x1=0.5; x2=2.25; y1=1; y2=3;
x = [x1, x2, x2, x1, x1];
y = [y1, y1, y2, y2, y1];
plot(x, y, 'k');
xlim([0 5]);
ylim([0 8]);
pause(0.5)
hold on;
x1=2.25; x2=4; y1=1; y2=3;
x = [x1, x2, x2, x1, x1];
y = [y1, y1, y2, y2, y1];
plot(x, y, 'k');
pause(0.5)
hold on
x1=0.5; x2=2.25; y1=3; y2=5;
x = [x1, x2, x2, x1, x1];
y = [y1, y1, y2, y2, y1];
plot(x, y, 'k');
pause(0.5)
hold on
x1=2.25; x2=4; y1=3; y2=5;
x = [x1, x2, x2, x1, x1];
y = [y1, y1, y2, y2, y1];
plot(x, y, 'k');
pause(0.5)
hold on
x1=0.5; x2=2.25; y1=5; y2=7;
x = [x1, x2, x2, x1, x1];
y = [y1, y1, y2, y2, y1];
plot(x, y, 'k');
pause(0.5)
hold on
x1=2.25; x2=4; y1=5; y2=7;
x = [x1, x2, x2, x1, x1];
y = [y1, y1, y2, y2, y1];
plot(x, y, 'k');
pause(0.5)
axis([0 5 0 8]);
% Created a percent range between 0% and 100% in 10 divisions.
yline(1,'--','0%');
pause(0.5)
yline(1.6,'--','10%');
pause(0.5)
yline(2.2,'--','20%');
pause(0.5)
yline(2.8,'--','30%');
pause(0.5)
yline(3.4,'--','40%');
pause(0.5)
yline(4,'--','50%');
pause(0.5)
yline(4.6,'--','60%');
pause(0.5)
yline(5.2,'--','70%');
pause(0.5)
yline(5.8,'--','80%');
pause(0.5)
yline(6.4,'--','90%');
pause(0.5)
yline(7,'--','100%');
% Plot title and axis labels.
title('Bottle Accumulator on the x-y Plane');
xlabel('Width (ft)');
ylabel('Height (ft)');
