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Math Help - Interest Formula Help Please!!

  1. #1
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    Interest Formula Help Please!!

    Hey,

    I forgot the formula for interest.

    The formula sloves this:
    Let say you got a savings account and you got $1,000 in it. The interest is 5% every month (i wish) so the formula is 1000 * 1.05 = B B= Balance

    But next month it will be 1050 * 1.05 = B

    Can you guys give me the formula for this. If i remember right it was like

    startbalance [1 + interest ^ 2) * month] = newbalance

    But that is wrong i think

    Thanks for you help.


    EDIT: I think it is this: StartBalance * (1+I)^ number of years
    Last edited by hechen; March 19th 2008 at 05:08 PM.
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  2. #2
    Senior Member topher0805's Avatar
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    That is correct just don't square the interest.


    NewBalance = 1000(1+0.05)^M

    Where M is the number of months.
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  3. #3
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    Quote Originally Posted by topher0805 View Post
    That is correct just don't square the interest.


    NewBalance = 1000(1+0.05)^M

    Where M is the number of months.
    No, because if you do it that way it will always multiply by the $1,000. The formula i was looking for for every month it will multiply by the last month balance.
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  4. #4
    Senior Member topher0805's Avatar
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    Quote Originally Posted by hechen View Post
    No, because if you do it that way it will always multiply by the $1,000. The formula i was looking for for every month it will multiply by the last month balance.
    Using my formula:

    After Month 1: 1050

    Month 2: 1102.5

    Month 3: 1157.625

    What is wrong with this? This formula will give you the correct balance after any month.
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  5. #5
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    Quote Originally Posted by topher0805 View Post
    Using my formula:

    After Month 1: 1050

    Month 2: 1102.5

    Month 3: 1157.625

    What is wrong with this? This formula will give you the correct balance after any month.
    Because it for JAVA Programming
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  6. #6
    Senior Member topher0805's Avatar
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    Are you familiar with the compound interest formula? The general formula is:

    C = P(1 + i)^n

    Where P is the principal, i is the interest in decimal form and n is the amount of periods.
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  7. #7
    Senior Member topher0805's Avatar
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    Quote Originally Posted by hechen View Post
    Because it for JAVA Programming
    That doesn't change the formula.
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  8. #8
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    Quote Originally Posted by hechen View Post
    Because it for JAVA Programming
    Quote Originally Posted by topher0805 View Post
    Using my formula:

    After Month 1: 1050

    Month 2: 1102.5

    Month 3: 1157.625

    What is wrong with this? This formula will give you the correct balance after any month.
    Yeah you gave me that.
    In JAVA i need a formula.

    Thanks for confirming my EDIT up there.
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  9. #9
    Senior Member topher0805's Avatar
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    Quote Originally Posted by hechen View Post
    Yeah you gave me that.
    In JAVA i need a formula.

    Thanks for confirming my EDIT up there.


    amount = principal * Math.pow( 1.0 + rate, year );


    Something like that...
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  10. #10
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    Quote Originally Posted by topher0805 View Post
    amount = principal * Math.pow( 1.0 + rate, year );


    Something like that...
    I seen like you know JAVA too.
    Do you remember the power symbol for JAVA i kinda forgot about it
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  11. #11
    Senior Member topher0805's Avatar
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    Quote Originally Posted by hechen View Post
    I seen like you know JAVA too.
    Do you remember the power symbol for JAVA i kinda forgot about it
    You don't need it. Just use Math.pow and use the format like I showed.
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  12. #12
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    Quote Originally Posted by topher0805 View Post
    You don't need it. Just use Math.pow and use the format like I showed.
    Thanks!

    There is my code if you wan to see it:

    import java.io.*;
    import java.text.NumberFormat;

    public class Interest {

    public static void main(String args[]) throws IOException {

    BufferedReader keyboard =
    new BufferedReader(new InputStreamReader(System.in));
    double Principal, Rate, Month, Balance;
    NumberFormat currency = NumberFormat.getCurrencyInstance();

    System.out.print("What Your Starting Balance? ");
    Principal = Double.parseDouble(keyboard.readLine());
    Rate = 5 / 100.00; /*To change the rate change the 5 to any other number.*/
    System.out.print("How many months? ");
    Month = Integer.parseInt(keyboard.readLine());
    System.out.println("------------------------------");

    Balance = Principal * Math.pow( 1.0 + Rate, Month );

    System.out.print("Your Balance is: ");
    System.out.println(currency.format(Balance));
    System.out.println();
    }
    }


    It for school.
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