Compound interest calculator in Python-CodePudding

def bank(balance, extra, time, intrestRate):
    intrest = (balance   extra * time * intrestRate )/100
    return intrest

balance = float(input("Enter current balance:"))
extra = float(input("Amount added at end of year:"))
time = int(input("How many years:"))
intrestRate = float(input("Amount of intrest:"))

intrest = bank(balance, extra, time, intrestRate)

for i in range(time): 
    amount = extra   balance * (1.0   intrestRate) ** i
    print("Amount:", amount)

So this is what I have, and I think the issue is whenever adding the extra amount at the end of each year something is wrong with how I a doing the math.. ( Not my strong suite )

Using https://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php

To check my calculations and it seems like the first year comes out correct but... everything else after that is wrong.

CodePudding user response：

Why do you need to use for i in range(time):? Can't you just do amount = extra balance * (1.0 intrestRate) ^ time? Also, you are only adding "extra" once, you should add it for every year.

CodePudding user response：

Compound Interest Formula:

$A = P(1 \frac{r}{n})^{nt}$

A represents the final amount in the account
P is the principal (the original amount of money)
t represents the time in years
n represents the number of times per year, interest is compounded
r represents the rate of interest

Code:

n = int(input("Number of times per year, interest is compounded"))
.
.
.
amount = balance * (1.0   intrestRate/n) ** (i*n)

Example:

If you have a bank account whose principal = $1,000, and your bank compounds the interest twice a year at an interest rate of 5%, how much money do you have in your account at the year's end?

$A = 1000(1 \frac{0.05}{2})^{2*1}$

$A = 1000(1 0.025)^{2}$

$A = 1000(1.025)^{2}$

A = 1050.63

CodePudding user response：

I understand the problem. This should work for you. I have also included plotting since you mentioned that it was for an assignment. You can remove it if you don't need it.

Note: install matplotlib if not done already: (pip install matplotlib)

import matplotlib.pyplot as plt


principal = float(input("Enter current balance:"))
extra = float(input("Amount added at end of year:"))
years = int(input("How many years:"))
rate = float(input("Amount of intrest:"))/100


# initially, the amount is the principal
# extra is only added at the end of the year
amount = principal

# interest earned is also 0 initially 
interest = 0

# needed for plotting
# Comment these out if you don't want to plot
y = [principal]
x = [i for i in range(years 1)]



print(f"year: 0\tamount:{amount}")

for year in range(1, years 1):
    interest = amount * rate # calculate the interest on the current amount
    amount = amount   interest   extra # add the extra and interest
    y.append(amount) # comment this out if plotting not needed
    print(f"year: {year}\tInterest: {round(interest,2)}\tAmount: {round(amount,2)}\n")
    
    
print(f"Total Interest Earned: {interest}, Amount: {amount}")


plt.plot(x,y, marker="o")
plt.xlabel("Amount")
plt.ylabel("Years")
plt.show()