Question

C++,

Can you please explain to me with simple english what I need to do for this exercise ?

http://screencast.com/t/6vR8sezk0

Answer 1

So you have the following input:
loan_amount
number_of_years
interest_rate

Then you basically need to generate all the payments that someone would have to make.

Answer 2

Sorry, I'm just trying to simplify and understand this.. The monthly payment for a given loan pays the principal and the interest, so your monthly payment would be:
payment = principal + interest, where:
interest = interest_rate * principal

and after each payment has been made, your principal goes down to:
principal = principal - payment (new principal becomes original principal minus the payment u made)

Answer 3

can you please explain to me whats a principal , interest , interest rate ?

Answer 4

I think thats why I am confused

Answer 5

Principal is the amount you owe.. Suppose you borrow $100 from me. Principal is going to be $100.

Answer 6

Suppose you pay me part of the loan, or $25 - Your principal becomes $75.

Answer 7

Do you understand what a principal is so far?

Answer 8

Ok I understood the principal

Answer 9

Ok, now let's continue with the interest rate:
Suppose I let you borrow money from me. I might be nice, and let you borrow it for free, meaning the interest rate would be 0% (So based on the contract, every month you would be overpaying me by 0% of the amount that you owe me originally - in this case you would not be overpaying me as 0% of $100 is 0).
But others are not as nice as I am, and charge you a fee in order to borrow money from them. So suppose they charge you a monthly interest rate of 3%, and you have to make payments to them every month.

Answer 10

Let me know if you're still following..

Answer 11

Ok I got it so far

Answer 12

So suppose you borrow $100 PRINCIPAL at 3% INTEREST RATE, and plan on paying it back over a year in $10 increments.
The INTEREST that you would pay in the first month, would be 3% of the PRINCIPAL (amount you owe):
$100*0.03 = $3

Answer 13

So in the first month, your payment would be:
$10+$3=$13 (btw all of this depends on the contract you sign, etc., I'm just making these numbers up, your actual monthly payment would probably be calculated for you)

Answer 14

So now that you've paid them back $10 of the loan, your new PRINCIPAL is:
$100-$10 = $90
The INTEREST RATE is still 3% (again depends on the contract, but let's say that you locked the interest rate, and it isn't going to change over the time you pay back the loan).
The INTEREST is still 3% of the PRINCIPAL amount, but the PRINCIPAL is now $90 (you only owe them $90 now), so your INTEREST is:
$90*0.03 = $2.7

Answer 15

So this month you'll pay:
$10+2.7=$12.7
And your PRINCIPAL will go down to:
$90-$12.7 = $77.3
and the cycle repeats..

Answer 16

thank's a lot

Answer 17

np

Answer 18

@bahrom7893 in the problem do I have to pay monthly ? If yes then do I need to divide my monthly payments into equal amounts + the new interest each time ?

Answer 19

I believe the problem does state that you need to pay monthly. The user would enter the number of years, so if you entered say 3 years, you'd first multiply that by 12, since you'd be paying over 36 months, and then divide the principal by that amount to get equal payments I suppose.

Answer 20

ok