Python Project 1-Financial calculators Solved

P4.2-2 􏰑 Discovering Computer Science, Second Edition

Question 4.2.1 How long would it take to pay off $20,000 in student loans with a 4% interest rate if you paid $100 per month? Approximately how much would you have to pay per month to pay off the loan in ten years?

Question 4.2.2 If you run your program to determine how long it would take to pay off the same loan if you paid only $50 per month, you should encounter a problem. What is it?

Part 2: How much will I have for retirement?

Your second calculator will compare the retirement nest eggs that result from making two different monthly investments in a retirement fund. Your program should prompt for the following inputs:

• the initial balance in the retirement account
• the current age of the investor
• the desired retirement age of the investor
• the expected nominal annual rate of return on the investment • two monthly investment amounts

Then write a function

   compareInvestments(balance, age, retireAge, rate, monthly1, monthly2)

that computes the final balance in the retirement account, for each monthly in- vestment, when the investor reaches his or her retirement age. The interest on the current balance should compound monthly at a rate of rate / 100 / 12. The function should plot the growth of the retirement account balance for both monthly investment amounts, and then print the two final balances along with the additional amount that results from the higher monthly investment. For example, your output might look like this:

Account balance ($)

Initial balance: 1000
Current age: 20
Retirement age: 70
Nominal annual percentage rate of return: 4.2
Monthly investment 1: 100

Monthly investment 2: 150

The final balance from investing $100.00 per month: $212030.11.
The final balance from investing $150.00 per month: $313977.02.
If you invest $50.00 more per month, you will have $101946.91 more at retirement.

4.8 PROJECTS 􏰑

P4.2-3

Question 4.2.3 Suppose you are 30 and, after working for a few years, have managed to save $6,000 for retirement. If you continue to invest $200 per month, how much will you have when you retire at age 72 if your investment grows 3% per year? How much more will you have if you invest $50 more per month?

Part 3: How long will my retirement savings last?

Your third calculator will initially perform the same computation as your previous calculator, but with only one monthly investment amount. After it computes the final balance in the account, it will estimate how long that nest egg will last into retirement. Your program will need to prompt for the same values as above (but only one monthly investment amount), plus the percentage of the final balance the investor plans to withdraw in the first year after retirement. Then write a function

   retirement(amount, age, retireAge, rate, monthly, percentWithdraw)

that adds the monthly investment amount to the balance in the retirement account until the investor reaches his or her retirement age, and then, after retirement age, withdraws a monthly amount. In the first month after retirement, this amount should be one-twelth of percentWithdraw of the current balance. For every month thereafter, the withdrawal amount should increase according to the rate of inflation,

Account balance ($)

P4.2-4 􏰑 Discovering Computer Science, Second Edition

assumed to be 3% annually. Every month, the interest on the current balance should compound at a rate of rate / 100 / 12. The function should plot the retirement account balance over time, and then print the age at which the retirement funds run out. For example, your program output might look like this:

   Initial balance: 10000
   Current age: 20
   Retirement age: 70
   Annual percentage rate of return: 4.2
   Monthly investment: 100

   Annual withdrawal % at retirement: 4
   Your savings will last until you are 99 years and 10 months old.

Question 4.2.4 How long will your retirement savings last if you follow the plan outlined in Question 4.2 (investing $200 per month) and withdraw 4% at retirement?

Account balance ($)