Compound Interest Calculator in Python

Introduction

• Objective: Create a compound interest calculator in Python.
• Definition of Interest: Charge for borrowing money; accrual of interest in bank accounts.

Key Variables

1. Principal: Initial investment amount.
2. Rate: Rate of interest (as a percentage).
3. Time: Duration in years for which the interest is calculated.

Program Structure

• Use of while loops to validate user input.

Input Validation

• Principal Input:

  • Prompt user to input principal amount.
  • Use while loop: while principal <= 0
  • Typecast input to float.
  • Inform user if the principal is invalid.

• Rate Input:

  • Similar structure as principal input.
  • Prompt for interest rate and validate it.

• Time Input:

  • Prompt user for time in years.
  • Typecast input to integer.
  • Validate input to ensure it's greater than zero.

Example Tests

• Validations:
  • Negative principal or rate prompts error.
  • Valid values are accepted (e.g., $1000, 10%).

Interest Calculation

• Formula for Compound Interest:
  • Total balance = Principal × (1 + (Rate / 100))^Time
• Print new balance using formatted output.

Example Calculation

• Scenario 1:

  • Principal: $1,000
  • Rate: 10%
  • Time: 1 year
  • New balance: $1,100

• Scenario 2:

  • Principal: $500
  • Rate: 7%
  • Time: 2 years
  • New balance: $572.45

Allowing Zero Values

• Variations for user input: Allow zero values by modifying the while loop conditions.
• Use while true for loop with explicit break statements.

Example of Adjusted Code

• Allow inputs of zero:
  • Example: Entering zero for principal leads to a displayed balance of zero.

Conclusion

• Two methods to implement input validation:
  1. Standard while loop with conditions.
  2. While true with break statements.
• The project demonstrates the use of while loops in Python with practical application in finance.