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-   -   Little Help with investment and interest rates (http://www.go4expert.com/forums/little-help-investment-rates-t18445/)

 Prof. Krauf 9Jul2009 23:03

Little Help with investment and interest rates

Hi. I'm currently stuck here trying to figure out this code I'm trying to construct. I'm trying to write a function that computes future investment value at an interest rate given for a number of years.

so far I've constructed this.

Code:

```#include <iostream> using namespace std; int main() { double futureInvestmentValue (double investmentAmount,       double monthlyInterestRate, int years); accumulatedValue = investmentAmount x (1 + monthlyInterestRate) system ("pause"); return 0; }```

I believe I should have something that involves/looks like this?

The amount invested: 1000
Annual interest rate: 9%

Years Future Value

1 1093.8
2 1196.41
...
29 13467.25
30 14730.57

 xpi0t0s 10Jul2009 03:23

Re: Little Help with investment and interest rates

Start by working out how you would do it with a calculator. Then just convert that into C code.
If you can't do the second part, post how you would do it with a calculator and we can help you.

 Prof. Krauf 10Jul2009 04:50

Re: Little Help with investment and interest rates

Do you mean something like using the InvestAmount as say 1000 and multiply that by 1 and 0.09. That would come out to be 1001.09 right? Errr.

 Prof. Krauf 10Jul2009 07:07

Re: Little Help with investment and interest rates

hrm.

 xpi0t0s 10Jul2009 11:30

Re: Little Help with investment and interest rates

How are you going to calculate the interest? Will it be once a year just adding 9% of the balance? Will it be monthly (as you seem to refer to this at some point) and if monthly will that be 1/12 of 9%, or the 12th root of (1+9%) (the latter allows for compound interest which will work out at 9%pa, whereas the former will give you more than 9% over the year)?

If it's just once a year adding 9% to the balance, then the calculation is just
balance = balance * (1+annualInterestRate)

so for example a balance of 1000 becomes 1000*(1+0.09) = 1090.

But where did you get the following figures from, and how was 1093.8 calculated?
Quote:
 The amount invested: 1000 Annual interest rate: 9% Years Future Value 1 1093.8 2 1196.41

 Prof. Krauf 11Jul2009 02:42

Re: Little Help with investment and interest rates

Well I was just asking if it should look something like that.

what should go in for the cout part?

 xpi0t0s 11Jul2009 04:35

Re: Little Help with investment and interest rates

Dunno. This is why I asked where you got those values from. 1093.8 obviously isn't 1000*(1+0.09) so that must have been derived by some other calculation.

Just trying an educated guess in a calculator: 1000*(1+0.09/12)^12=1093.806898 -- that seems close; that's the interest rate divided by 12 and applied monthly as compound, thus leading to 9.38% interest rather than the stated 9% -- that may or may not be correct, which is why you need to check where you got 1093.8 from -- who gave you that number, or was it a number you worked out yourself?

Why do you have a variable called monthlyInterestRate? If you're just calculating the value year on year at 9% per annum, you would use the annual rate directly. Or have you been told to calculate the value monthly?

> Well I was just asking if it should look something like that.

No, it'll be very different. You need to declare your variables, and you shouldn't be declaring futureInvestmentValue() as a private function.

> what should go in for the cout part?

Depends what you want to display. If you want to display
1 1093.8
2 1196.41
then probably what you want will be something like:
Code:

`cout << yearNumber << " " << accumulatedValue << endl;`
But you have quite a way to go before that.

 Prof. Krauf 11Jul2009 06:58

Re: Little Help with investment and interest rates

this maybe?

Code:

```#include <iostream> using namespace std; double futureInvestmentValue ( double investmentAmount,                               double monthlyInterestRate,                                 int years); int main() {   system ("pause");   return 0; } double futureInvestmentValue ( double investmentAmount,                               double monthlyInterestRate,                                 int years) {   // FV = PV ( 1 + i)ª   //  investmentAmount * (1 + monthlyInterestRate);   }```

 xpi0t0s 11Jul2009 17:30

Re: Little Help with investment and interest rates

No idea. I'm stuck until you answer my questions.

 Prof. Krauf 12Jul2009 05:01

Re: Little Help with investment and interest rates

I was given the number part from someone else, but I think I've got it. Annual result is what i need though adding in amounts from user.

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