(Financial application: compound value) Suppose you save $100 each month into a

Question

(Financial application: compound value) Suppose you save $100 each month into a savings account with the annual interest rate 5%. Thus, the monthly interest rate is 0.05/12 = 0.00417. After the first month, the value in the account becomes 100 * (1 + 0.00417) = 100.417 After the second month, the value in the account becomes (100 + 100.417) * (1 + 0.00417) = 201.252 After the third month, the value in the account becomes (100 + 201.252) * (1 + 0.00417) = 302.507 and so on. Write a program that prompts the user to enter a monthly saving amount and displays the account value after the sixth month. (In Exercise 5.30, you will use a loop to simplify the code and display the account value for any month.) */

NB:Make sure to use the NumberFormat coding for currency to display your results.

Explanation / Answer

Answer:

import java.util.*;
import java.lang.*;
import java.io.*;
import java.util.Scanner;
class FinancialApplication {
   public static void main(String[] args) {
       Scanner input = new Scanner(System.in);   // Create a new Scanner object.
       final double MONTHLY_INTEREST_RATE = 0.00417;   // Initialize constant value

       // Prompt the user to enter a montly saving amount
       System.out.print("Enter the monthly saving amount: ");
       double savingAmount = input.nextDouble();

       // Compute first month account value
       double total = 100 * (1 + MONTHLY_INTEREST_RATE);
       // Compute second month account value
       total = (100 + total) * (1 + MONTHLY_INTEREST_RATE);
       // Compute third month account value
       total = (100 + total) * (1 + MONTHLY_INTEREST_RATE);
       // Compute forth month account value
       total = (100 + total) * (1 + MONTHLY_INTEREST_RATE);
       // Compute fifth month account value
       total = (100 + total) * (1 + MONTHLY_INTEREST_RATE);
       // Compute sixth month account value
       total = (100 + total) * (1 + MONTHLY_INTEREST_RATE);

       // Display result
       System.out.println("After the sixth month, the account value is " + total);
   }
}

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