invest

Category: Programming

Author: Benson Limketkai and Marty Stepp

Book Chapter: 3.3

Problem: invest

Write a method named invest that computes the interest earned on a financial investment. Once per year, the bank pays interest to the investor at a given fixed rate. As the investment earns interest, that interest is added to the investment and therefore the interest begins earning interest of its own ("compounding").

Your method should accept three parameters: the initial amount of the investment in dollars (as a real number such as 1500.0 for $1,500.00), the yearly interest rate (as a real number such as 3.5 for 3.5% interest) and the number of years for which to invest (as an integer such as 6 for 6 years).

Your method should print the value of the investment after each year, as well as the total amount of interest earned over all years. For example, an investment of $100.00 at 10% interest for 5 years would lead to this call:

invest(100.00, 10.0, 5);            // $100.00 at 10% interest for 5 years

The call would produce the following console output. Dollar amounts print with 2 digits after the decimal.

After year 1: $110.00
After year 2: $121.00
After year 3: $133.10
After year 4: $146.41
After year 5: $161.05
Total interest earned: $61.05

Notice that we are not simply adding 10% of $100.00 (or $10.00) each year; that would lead to $50 of total interest earned. The first year adds 10% of $100.00, but the second year adds 10% of $110.00, or $11.00, leading to a total of $121.00. The third year adds 10% of $121.00, or $12.10, leading to a total of $133.10. The interest is cumulative. You may assume that all parameter values passed are non-negative.