Question
You have just purchased a stereo system that cost $1,000 on the following credit plan: no down payment, an interest rate of 18% per year (and hence 1.5% per month), and monthly payments of $50. The monthly payment of $50 is used to pay the interest, and whatever is left is used to pay part of the remaining debt. Hence, the first month you pay 1.5% of $1,000 in interest. That is $15 in interest. So, the remaining $35 is deducted from your debt, which leaves you with a debt of $965.00. The next month, you pay interest of 1.5% of $965.00, which is $14.48. Hence, you can deduct $35.52 (which is $50 – $14.48) from the amount you owe. Write a program that tells you how many months it will take you to pay off the loan, as well as the total amount of interest paid over the life of the loan. Use a loop to calculate the amount of interest and the size of the debt after each month. (Your final program need not output the monthly amount of interest paid and remaining debt, but you may want to write a preliminary version of the program that does output these values.) Use a variable to count the number of loop iterations and hence, the number of months until the debt is zero. You may want to use other variables as well. The last payment may be less than $50 if the debt is small, but do not forget the interest. If you owe $50, your monthly payment of $50 will not pay off your debt, although it will come close. One month’s interest on $50 is only 75 cents.
Answer
Program:
// InterestCalculator.java
public class InterestCalculator
{
private static final double COST_OF_STEREO_SYSTEM = 1000.00;
private static final double INTEREST_RATE_PER_YEAR = 0.18;
private static final double MONTHLY_PAYMENT = 50.00;
public static void main(String[] args)
{
double debt = COST_OF_STEREO_SYSTEM;
double interestRatePerMonth = INTEREST_RATE_PER_YEAR / 12;
double interest = 0;
double totalInterest = 0;
double principal = 0;
int numberOfMonths = 0;
while (debt > 0)
{
interest = debt * interestRatePerMonth;
if (debt >= MONTHLY_PAYMENT)
principal = MONTHLY_PAYMENT - interest;
else
principal = debt;
debt = debt - principal;
numberOfMonths++;
totalInterest += interest;
}
System.out.printf("Amount of loan: $%.2f\n",COST_OF_STEREO_SYSTEM);
System.out.printf("Interest rate per year: %.2f%%\n",
(INTEREST_RATE_PER_YEAR * 100));
System.out.printf("Monthly payment: $%.2f\n", MONTHLY_PAYMENT);
System.out.println("Number of months needed to pay off the loan: " + numberOfMonths);
System.out.printf("Total amount of interest paid over the life of the loan: $%.2f\n",
totalInterest);
}
}
Output:
Amount of loan: $1000.00
Interest rate per year: 18.00%
Monthly payment: $50.00
Number of months needed to pay off the loan: 24
Total amount of interest paid over the life of the loan: $197.83
Discussions
sinaaa
import java.util.Scanner;
public class Review1 {
public static final double MONTHLY_PEYMENT = 50;
public static void main(String[] args) {
Scanner keyboard = new Scanner(System.in);
System.out.println("Enter loan amount:");
double loanAmount = keyboard.nextDouble();
System.out.println("Enter an interest rate per year in percent:");
double interestRatePerYear = keyboard.nextDouble();
double interestRatePerMonth,monthlyInterestPayment, remainingLoanPayment;
double totalInterest = 0;
interestRatePerMonth = (interestRatePerYear/12)/100;
int count=0;
do {
monthlyInterestPayment = interestRatePerMonth*loanAmount;
if(loanAmount >= MONTHLY_PEYMENT)
remainingLoanPayment = MONTHLY_PEYMENT - monthlyInterestPayment;
else
remainingLoanPayment = loanAmount;
double remainingLoan = loanAmount - remainingLoanPayment;
loanAmount = remainingLoan;
count++;
totalInterest += monthlyInterestPayment;
} while(loanAmount > 0);
System.out.printf("Number of months needed to pay off the loan is: %d\n", count);
System.out.printf("Total amount of interest paid over the life of the loan is: %.2f$", totalInterest);
keyboard.close();
}
}
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