Description

The compounded interest is the amount of money paid as interest on a loan. This example uses some radio buttons to let the user select the frequency by which to perform the calculation.

	P = Principal
	r = Annual (Interest) Rate
	m = Number of Compounding Periods per Year
	n = Total Number of Compounding Periods
	A = Amount Earned After n periods

Practical Learning: Creating the Application

1. Start a new Windows Application named CompoundedInterest
2. Design the form as followed:

   

   Control		Name	Text	Additional Properties
   GroupBox			Loan Setup
   Label			Principal:
   TextBox		txtPrincipal		TextAlign: Right
   Label			Interest Rate:
   TextBox		txtInterestRate		TextAlign: Right
   Label			%
   Label			Periods:
   TextBox		txtPeriods		TextAlign: Text
   Label			years
   GroupBox			Compound Frequency
   RadioButton		rdoMonthly
   RadioButton		rdoQuarterly
   RadioButton		rdoSemiannually
   RadioButton		rdoAnnually
   GroupBox			Calculations Results
   Label			Interest Earned:
   TextBox		txtInterestEarned	0.00	TextAlign: Right
   Label			Amount Earned:
   TextBox		txtFutureValue	0.00	TextAlign: Right
   Button		btnCalculate	Calculate
   Button		btnClose	Close

3. On the form, double-click the Calculate button and implement its Click() event as follows:
   

   namespace CompoundedInterest
   {
       public partial class Exercise : Form
       {
           public Exercise()
           {
               InitializeComponent();
           }
   
           private void btnCalculate_Click(object sender, EventArgs e)
           {
               double principal    = 0.00,
                      interestRate = 0.00,
                      periods      = 0.00;
               int    compoundType;
   
               // Retrieve the value of the principal
               try
               {
                   principal = double.Parse(txtPrincipal.Text);
               }
               catch (FormatException fe)
               {
                   MessageBox.Show("You must provide a valid value for the loan amount. " + Environment.NewLine +
                                   "The error produced is: " + fe.Message,
                                   "Compound Interest", MessageBoxButtons.OK, MessageBoxIcon.Information);
               }
   
               // Retrieve the interest rate
               try
               {
                   interestRate = double.Parse(txtInterestRate.Text) / 100;
               }
               catch (FormatException fe)
               {
                   MessageBox.Show("You must provide a valid value for the interest rate applied on the loan."
                                   + Environment.NewLine +
                                   "The error produced is: " + fe.Message,
                                   "Compound Interest", MessageBoxButtons.OK, MessageBoxIcon.Information);
               }
   
               // Get the number of years
               try
               {
                   periods = double.Parse(txtPeriods.Text);
               }
               catch (FormatException fe)
               {
                   MessageBox.Show("You must provide a valid number of years for the duration of the loan."
                                   + Environment.NewLine +
                                   "The error produced is: " + fe.Message,
                                   "Compound Interest", MessageBoxButtons.OK, MessageBoxIcon.Information);
               }
   
               // Find out what radio button was clicked to apply the compound frequency
               if (rdoMonthly.Checked)
                   compoundType = 12;
               else if (rdoQuarterly.Checked)
                   compoundType = 4;
               else if (rdoSemiannually.Checked)
                   compoundType = 2;
               else
                   compoundType = 1;
   
               // These values will make the calculation easier to read
               double i = interestRate / compoundType;
               double n = compoundType * periods;
   
               // Perform the necessary calculations
               double ratePerPeriod = interestRate / periods;
               double futureValue = principal * Math.Pow(1 + i, n);
               double interestEarned = futureValue - principal;
   
               // Display the values in the appropriate text boxes
               txtInterestEarned.Text = interestEarned.ToString("C");
               txtFutureValue.Text = futureValue.ToString("C");
           }
   
           private void btnClose_Click(object sender, EventArgs e)
           {
               Close();
           }
       }
   }

4. Return to the form and double-click the Close button
5. Implement its OnClick() event as follows:

   private void btnClose_Click(object sender, EventArgs e)
   {
       Close();
   }

6. To test the application, press Ctrl + F5

   

7. In the top text boxes, specify the values as follows:

   Principal: 16500
   Interest Rate: 12.75
   Periods:       5

8. On the form, click the Monthly radio button:

   

9. Click the Calculate button:

   

10. Click the Quarterly radio button then click Calculate button:

    

11. Close the form and return to your programming environment
12. Close your programming environment

Application

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