Interest Rate Calculator C++ Program

Interest rate calculator c++ Program

Are you looking to understand how to calculate loan interest rates using C++? In this post, we’ll walk you through a simple Interest Rate Calculator C++ Program that can estimate the annual interest rate based on the loan amount, monthly payment, and loan term. This can be particularly useful for financial planning and understanding loan offers.

Introduction

Interest rate calculations are a fundamental aspect of finance, whether you’re taking out a mortgage, a car loan, or a personal loan. Knowing how to compute the interest rate helps you make informed financial decisions. In this tutorial, we will build an Interest Rate Calculator C++ Program the annual interest rate given a loan amount, monthly payment, and loan term in years.

Interest Rate Calculator C++ Program

Source Code

Below is the complete code for the Interest Rate Calculator C++ program:

#include <iostream>
#include <cmath>

using namespace std;

double calculateMonthlyPayment(double loanAmount, double annualInterestRate, int loanTermYears) {
    double monthlyInterestRate = annualInterestRate / 12 / 100;
    int totalPayments = loanTermYears * 12;
    return loanAmount * monthlyInterestRate / (1 - pow(1 + monthlyInterestRate, -totalPayments));
}

double calculateAnnualInterestRate(double loanAmount, double monthlyPayment, int loanTermYears) {
    int totalPayments = loanTermYears * 12;
    double low = 0.0;
    double high = 100.0;
    double mid;

    while (high - low > 0.0001) {
        mid = (low + high) / 2;
        double monthlyInterestRate = mid / 12 / 100;
        double estimatedPayment = loanAmount * monthlyInterestRate / (1 - pow(1 + monthlyInterestRate, -totalPayments));

        if (estimatedPayment < monthlyPayment) {
            low = mid;
        }
        else {
            high = mid;
        }
    }

    return mid;
}

int main() {
    double loanAmount;
    double monthlyPayment;
    int loanTermYears;

    cout << "Enter loan amount: ";
    cin >> loanAmount;
    cout << "Enter monthly payment: ";
    cin >> monthlyPayment;
    cout << "Enter loan term (in years): ";
    cin >> loanTermYears;

    double annualInterestRate = calculateAnnualInterestRate(loanAmount, monthlyPayment, loanTermYears);
    cout << "Estimated annual interest rate: " << annualInterestRate << "%" << endl;

    return 0;
}

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GitHub Repository

Click here on the link to see our GitHub repository.

Explanation For Interest Rate Calculator C++ Program

calculateMonthlyPayment

This function computes the monthly payment for a loan given the loan amount, annual interest rate, and loan term in years.

double calculateMonthlyPayment(double loanAmount, double annualInterestRate, int loanTermYears) {
    double monthlyInterestRate = annualInterestRate / 12 / 100;
    int totalPayments = loanTermYears * 12;
    return loanAmount * monthlyInterestRate / (1 - pow(1 + monthlyInterestRate, -totalPayments));
}

calculateAnnualInterestRate

This function calculates the annual interest rate using a binary search algorithm. It iteratively adjusts the interest rate until the estimated monthly payment matches the input monthly payment.

main

double calculateAnnualInterestRate(double loanAmount, double monthlyPayment, int loanTermYears) {
    int totalPayments = loanTermYears * 12;
    double low = 0.0;
    double high = 100.0;
    double mid;

    while (high - low > 0.0001) {
        mid = (low + high) / 2;
        double monthlyInterestRate = mid / 12 / 100;
        double estimatedPayment = loanAmount * monthlyInterestRate / (1 - pow(1 + monthlyInterestRate, -totalPayments));

        if (estimatedPayment < monthlyPayment) {
            low = mid;
        }
        else {
            high = mid;
        }
    }

    return mid;
}

The main function collects user input for the loan amount, monthly payment, and loan term. It then calls calculateAnnualInterestRate to compute and display the estimated annual interest rate.

int main() {
    double loanAmount;
    double monthlyPayment;
    int loanTermYears;

    cout << "Enter loan amount: ";
    cin >> loanAmount;
    cout << "Enter monthly payment: ";
    cin >> monthlyPayment;
    cout << "Enter loan term (in years): ";
    cin >> loanTermYears;

    double annualInterestRate = calculateAnnualInterestRate(loanAmount, monthlyPayment, loanTermYears);
    cout << "Estimated annual interest rate: " << annualInterestRate << "%" << endl;

    return 0;
}

How It Works

  1. User Input: The program prompts the user to input the loan amount, monthly payment, and loan term in years.
  2. Interest Rate Calculation: Using the binary search algorithm, the program calculates the annual interest rate resulting in the given monthly payment.
  3. Output: The program outputs the estimated annual interest rate.

Running the Program

To compile and run the program, follow these steps:

  1. Save the code in a file named InterestRateCalculator.cpp.
  2. Open a terminal or command prompt and navigate to the directory containing the file.
  3. Compile the program using:
   g++ -o InterestRateCalculator InterestRateCalculator.cpp
  1. Run the program using:
   ./InterestRateCalculator

Conclusion

This simple C++ program can be a handy tool for anyone looking to estimate the annual interest rate for a loan based on known values of the loan amount, monthly payment, and loan term. Understanding how to calculate interest rates can help you make better financial decisions and understand the cost of borrowing more clearly.

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