Compound interest
How savings in a bank account grows with interest.
Compound interest, also known as compounding, is when you earn money (interest) on both the money you save and the interest you earn on that saving. So every year when you earn interest, you also earn interest on the interest itself.
Make
Write a program that outputs the balance each year from three inputs: the balance in pounds sterling, the percentage interest rate and the target balance to achieve. The program stops when the target balance is reached.
Use this boilerplate code as a starting point:
Success Criteria
Remember to add a comment before a subprogram, selection or iteration statement to explain its purpose.
Complete the subprogram called `compound` that:
- Calculates a new balance from the current balance plus the amount earned from the interest. E.g. If the amount is £1000 and the annual interest rate is 3% then 3% of 1000 is 30, so the new balance would be £1030.
- Outputs the balance each year until the target balance is met or exceeded.
Hint: `interest_rate = interest_rate / 100` will convert the interest rate into a number you can multiply by the balance to calculate the new balance.
Complete the `main program` so that:
- The user can input the balance to the nearest pound.
- The user can input the interest rate as a percentage.
- The user can input the target balance to achieve.
Typical inputs and outputs from the program would be:
Enter the balance to the nearest pound: £1000
Enter the % interest rate: 3
Enter the target balance to the nearest pound: £1300
Year 1 : Balance £ 1030
Year 2 : Balance £ 1061
Year 3 : Balance £ 1093
Year 4 : Balance £ 1126
Year 5 : Balance £ 1160
Year 6 : Balance £ 1195
Year 7 : Balance £ 1231
Year 8 : Balance £ 1268
Year 9 : Balance £ 1306
Knowledge Organiser
Use these resources as a reference to help you meet the success criteria.
Programming guide:
Flowcharts:
Evaluate
Run the unit tests below to check that your program has met the success criteria.
Enter the balance to the nearest pound: £5000
Enter the % interest rate: 4
Enter the target balance to the nearest pound: £8000
Year 1 : Balance £ 5200
Year 2 : Balance £ 5408
Year 3 : Balance £ 5624
Year 4 : Balance £ 5849
Year 5 : Balance £ 6083
Year 6 : Balance £ 6326
Year 7 : Balance £ 6579
Year 8 : Balance £ 6842
Year 9 : Balance £ 7116
Year 10 : Balance £ 7401
Year 11 : Balance £ 7697
Year 12 : Balance £ 8005
Enter the balance to the nearest pound: £100
Enter the % interest rate: 2
Enter the target balance to the nearest pound: £110
Year 1 : Balance £ 102
Year 2 : Balance £ 104
Year 3 : Balance £ 106
Year 4 : Balance £ 108
Year 5 : Balance £ 110
Check that you have:
- Used comments within the code to describe the purpose of subprograms, conditions and iterations.
- Used meaningful identifier names. That means the names of subprograms and variables indicate what they are for.
