Question

Write a program that implements a user defined function that accepts Principal Amount, Rate, Time, Number of Times the interest is compounded to calculate and displays compound interest.(Hint: $CI=\left(\right(P\ast (1+R/N){)}^{NT})$

Answer 1

The hint given in the question has a mistake. The formula (P*(1+R/N)^NT) will give us amount, not compound interest.

Program:

#Defining the function

def calculate (p, r, t, n=1) :

#calculation the amount

amount = p * (1 + r/(n * 100))**(n * t)

#calculating the compound interest and rounding it off to 2 decimal places

ci = round(amount - p, 2)

#displaying the value of the compound interest

print( "The compound interest will be " , ci)

#asking the principal, rate and time

p = float(input( "Enter the principal amount : " ) )

r = float(input( "Enter the rate of interest : " ) )

t = float(input( "Enter total time : " ) )

n = int(input( "Number of times the interest is compounded in a year\n(e.g. Enter 1 for yearly, 2 for half-yearly) : " ) )

if(n > 365) :

calculate (p, r, t ,n)

else :

print("Maximum number of times an interest is compounded can not be more than 365")

Output:

Enter the principal amount : 10000

Enter the rate of interest : 8

Enter total time : 5

Number of times the interest is compounded in a year

(e.g. Enter 1 for yearly, 2 to half-yearly ) : 4

The compound interest will be 4859.47