Requirements

? Print all floats to 2 decimal points unless stated otherwise

? You MUST use loops to solve this problem

Restrictions

? No global variables may be used

? Your program must have at least 1 user defined function

Description

For this problem you will be figuring out if it is more beneficial to pay off your loans first before

investing or if you should only make the minimum payments and invest the rest.

Some things to pay attention to

? Interest rates given are annual interests rates but we will be assuming that interest is

compounded monthly so the real rates to use will be 1/12 of what we are given

? We will assume that interest is compounded on our accounts before any payments or

contributions are made to them

? If the user has not finished paying off all of their loans when they retire they immediately pay

off their loans from their savings

? It is ok for savings to become negative because of this

Cautions about using this program for your own investment strategies

? All investments inherently carry risk with them

? This program assumes you are putting your money in a Roth IRA

? There is an easier way to solve this problem in real life. Remind me to tell you about it.

Assumptions

? Input will not always be valid

? If invalid input is received your program should continue to ask for more input until a

valid value is entered

? While input may be invalid it will always be of the correct type

Valid values for inputs

? Loans: A real number >= 0

? Annual loan interest rate: a real number >= 0

? Minimum payment: a real number >= 0

? Investment money: A real number >= minimum payment

? Current age: an integer >= 0

? Retirement age: an integer >= current age

? Annual rate of return: a real number >= 0

Hints

? This problem has no relationship to the monthly payment formula that we did in homework 1.

Don't try and use it

? Don't try and look up a closed form solution to this problem. I'm not sure if there is one and

the program requires you to use loops, so if you find one you couldn't use it anyway

? When solving this problem think about what you would do in real life when paying off your

loans / savings and have your program do that as well

? Make sure that you handle the month where you fully pay off your loans correctly. During that

month your loans might be less than your minimum payment

Examples

Example 1

Enter how much money you owe in loans: 42085.86

Enter the annual interest rate of the loans: 0.12

Enter your minimum monthly loan payment: 377.83

Enter how much money you will be putting towards loans/retirement each

month: 1176.53

Enter your current age: 33

Enter the age you plan to retire at: 60

Enter your predicted annual rate of return: .09

You should only make minimum payments on your loans and invest the rest

If you do you will have $1109488.57 as opposed to $946336.28 when you

retire.

Example 2

Enter how much money you owe in loans: 50000

Enter the annual interest rate of the loans: 0.06

Enter your minimum monthly loan payment: 350

Enter how much money you will be putting towards loans/retirement each

month: 1053

Enter your current age: 25

Enter the age you plan to retire at: 70

Enter your predicted annual rate of return: 0.05

You should pay of all of your loans before you start investing

If you do you will have $1651149.44 as opposed to $1619732.68 when you

retire.

Example 3

Enter how much money you owe in loans: 10000

Enter the annual interest rate of the loans: .02

Enter your minimum monthly loan payment: 100

Enter how much money you will be putting towards loans/retirement each

month: 500

Enter your current age: 18

Enter the age you plan to retire at: 20

Enter your predicted annual rate of return: 0.07

You should only make minimum payments on your loans and invest the rest

If you do you will have $2311.22 as opposed to $1835.38 when you retire.

Example 4

Enter how much money you owe in loans: -3

Enter how much money you owe in loans: -2

Enter how much money you owe in loans: 25000

Enter the annual interest rate of the loans: -2

Enter the annual interest rate of the loans: -8

Enter the annual interest rate of the loans: -17

Enter the annual interest rate of the loans: .04

Enter your minimum monthly loan payment: -3

Enter your minimum monthly loan payment: 500

Enter how much money you will be putting towards loans/retirement each

month: 2

Enter how much money you will be putting towards loans/retirement each

month: 5

Enter how much money you will be putting towards loans/retirement each

month: 300

Enter how much money you will be putting towards loans/retirement each

month: 600

Enter your current age: -9

Enter your current age: 25

Enter the age you plan to retire at: 12

Enter the age you plan to retire at: 13

Enter the age you plan to retire at: 68

Enter your predicted annual rate of return: -9

Enter your predicted annual rate of return: .03

You should pay of all of your loans before you start investing

If you do you will have $538083.32 as opposed to $537722.67 when you

retire.