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 £ 1060
Year 3 : Balance £ 1091
Year 4 : Balance £ 1123
Year 5 : Balance £ 1156
Year 6 : Balance £ 1190
Year 7 : Balance £ 1225
Year 8 : Balance £ 1261
Year 9 : Balance £ 1298
Year 10 : Balance £ 1336
Knowledge Organiser
Use these resources as a reference to help you meet the success criteria.
Programming guide:
Flowcharts:
Parsons:
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 £ 5848
Year 5 : Balance £ 6081
Year 6 : Balance £ 6324
Year 7 : Balance £ 6576
Year 8 : Balance £ 6839
Year 9 : Balance £ 7112
Year 10 : Balance £ 7396
Year 11 : Balance £ 7691
Year 12 : Balance £ 7998
Year 13 : Balance £ 8317
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.
