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# Need Help with amortization formula

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5 replies to this topic

### #1YNV_DeViouS  Members

Posted 02 August 2014 - 11:02 AM

So I currently taking a class in C++ which I find difficult only because I am not so experienced. I was wondering if anyone can help me figure out a while loop to calculate a single monthly payment for this program.

//Amortization Formula: R =        L * i
--------------------
1 - (1 + i)^-mt
#include <iostream>
#include <cmath>
#include <iomanip>

using namespace std;

double R; // amortization formula
double L = 0.00; // loan amount (principal)
double g; // gross salary
double r; // interest rate per year
int t = 30; // number of years for the loan
int m = 12; // number of payments in a year
double i = m / t;
int p; // monthly payment range

int grossSalary(); // prototype function of grossSalary
double interestRate(); // prototype function of interestRate
double monthlyPaymentRange(); // prototype function of monthlyPaymentRange
double maxTarget(); // prototype function of maxTarget
double monthlyPayment(); // prototype function of monthlyPayment

int main() // this combines all of the functions in order to give the monthly payment
{
grossSalary();
interestRate();
monthlyPaymentRange();
maxTarget();
monthlyPayment();
system("pause");
}

int grossSalary() // this function asks for the gross salary of the user and returns g (gross salary)
{
cout << "Please enter your yearly gross salary: ";
cin >> g;
return g;
}

double interestRate() // this function asks the user for an interest rate and returns r (interest rate)
{
cout << "Please enter an interest rate: ";
cin >> r;
return r;
}

double monthlyPaymentRange() // this function calculates the monthly payment range
{
p = g / 12 * 0.3;
cout << "The target (30% of monthly salary) monthly payment range is: " << p << endl;
return p;
}

double maxTarget() // this function calculates the maximum target house price
{
L = g * r - g;
cout << "Your max target house price is: " << L << endl;
return L;
}

double monthlyPayment() // this function calculates the monthly payment using the amortization formula
{
cout << "with a monthly payment of: " << R << endl;
while(L < p) // how to fix this?
{
cout << R << endl;
R = L * i / 1 - pow(1 + i, -m * t);
break;
}
return R;
}



I am completely stuck and don't know how to go about it. Any help would be great.

Edited by YNV_DeViouS, 02 August 2014 - 11:06 AM.

### #2DiegoSLTS  Members

Posted 02 August 2014 - 11:29 AM

I don't understand what you need. What's the problem? What should happen and what's happening instead?

Also, why do you need a while loop? Is it supposed to compute 12 * 30 (12 payments during 30 years) values? Shouldn't the while loop be in the main function if that's the case?

Anyway, even not understanding the problem, that while loop has some problems. First, you check for L < p, but those values never change, so the while will never end if it where for that condition. BUT you put a break there at the end of the block, so it will always end the while loop after the first iteration, which means it's actually working as an "if" statement.

Another mistake is that formula you're using to compute R. You need to put the right side between parentesis, you want to do (L * i) / (1 - pow(1 + i,- m * t)) and you're doing (L * i / 1) - (pow(1 + i, - m * t)).

Edited by DiegoSLTS, 02 August 2014 - 11:31 AM.

### #3YNV_DeViouS  Members

Posted 02 August 2014 - 11:34 AM

So what I am trying to do is calculate a monthly payment in a while loop that is within the monthly payment range. For example if the monthly payment range is 1240-1250, I need a monthly payment that is within those means. As for m and t, m is supposed to be the number of payments in a year (12) and t is supposed to be the number of years for the loan (30). I can calculate everything except for the monthly payment, I keep getting 0. I also put the break in their just for testing measures.

This is what the assignment says:

You program should then use the amortization formula in a loop, repeatedly trying different values
for L (loan amount). When the monthly payment computed is below and within $10 of the desired amount, the loop is finished. And I can't figure it out. Edited by YNV_DeViouS, 02 August 2014 - 11:36 AM. ### #4wintertime Members Posted 02 August 2014 - 12:01 PM Why dont you ask your teacher (thats his job) how function parameters work, how return values are used, how to find descriptive variable names and how to translate a formula into a C++ function? Edited by wintertime, 02 August 2014 - 12:02 PM. ### #5YNV_DeViouS Members Posted 02 August 2014 - 01:00 PM If only it were that easy. His response is try to use the book, search examples on Google etc. ### #6DiegoSLTS Members Posted 02 August 2014 - 02:30 PM You program should then use the amortization formula in a loop, repeatedly trying different values for L (loan amount). When the monthly payment computed is below and within$10 of the desired
amount, the loop is finished.

And I can't figure it out.

"Trying different values of L" means you must change L in some way inside the loop, so in the next iteration L is different and then R will be different.

"When the monthly payment computed is below and within \$10 of the desired amount, the loop is finished" means that you must check for that condition instead of "L < p". If R is the monthly payment computed then use it as part of the condition.

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