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Example Application: The Compound Interest
 

Compound Interest - Results

Introduction

The application we are going to create is used to calculate the amount owed on a loan using the principal, the interest rate, and the period.

Windows Controls:
     

Practical Learning Practical Learning: Introducing Radio Buttons

The application we are going to create is used to calculate the amount owed on a loan using the following formula:

Compound Interest Formula P = Principal
r = Annual (Interest) Rate
m = Number of Compounding Periods per Year
n = Total Number of Compounding Periods
A = Amount Earned After n periods
  1. Start a new Windows Application named CompoundInterest1
  2. In the Solution Explorer, right-click Form1.vb and click Rename
  3. Type CompoundInterest.vb and press Enter
  4. Design the form as followed:
     
    Compound Interest - Form Design
    Control Name Text Additional Properties
    GroupBox GroupBox   Loan Setup  
    Label Label   Principal:  
    TextBox TextBox txtPrincipal 0.00 TextAlign: Right
    Label Label   Interest Rate:  
    TextBox TextBox txtInterestRate 8.25 TextAlign: Right
    Label Label   %  
    Label Label   Number of Periods:  
    TextBox TextBox txtPeriods 1 TextAlign: Text
    Label Label   years  
    GroupBox GroupBox   Compound Frequency  
    RadioButton RadioButton rdoMonthly    
    RadioButton RadioButton rdoQuarterly    
    RadioButton RadioButton rdoSemiannually    
    RadioButton RadioButton rdoAnnually    
    GroupBox GroupBox   Results  
    Label Label   Interest Earned:  
    TextBox TextBox txtInterestEarned 0.00 TextAlign: Right
    ReadOnly: True
    Label Label   Amount Earned:  
    TextBox TextBox txtFutureValue 0.00 TextAlign: Right
    ReadOnly: True
    Button Button btnCalculate Calculate  
    Button Button btnClose Close  
  5. On the form, double-click the Close button and implement the event as follows:
      
    Private Sub btnCloseClick(ByVal sender As Object, 
                               ByVal e As System.EventArgs) 
                               Handles btnClose.Click
        End
End Sub
  6. On the form, click Monthly
  7. In the Properties window, double-click Checked to set its value to True
  8. On the form, double-click the Calculate button and implement its Click() event as follows:
      
    Private Sub btnCalculateClick(ByVal sender As System.Object, 
                                   ByVal e As System.EventArgs) 
                                   Handles btnCalculate.Click
        Dim Principal As Double
        Dim InterestRate As Double
        Dim InterestEarned As Double
        Dim FutureValue As Double
        Dim RatePerPeriod As Double
        Dim Periods As Double
        Dim CompoundType As Integer

        ' Retrieve the value of the principal
        Try
            Principal = CDbl(txtPrincipal.Text)
        Catch ex As Exception
            MsgBox("The value you entered for the principal " & 
                   "is not valid" & vbCrLf & "Please try again")
        End Try

        ' Retrieve the interest rate
        Try
            InterestRate = CDbl(txtInterestRate.Text) / 100
        Catch ex As Exception
            MsgBox("The value you entered for the interest rate " & 
                   "is not valid" & vbCrLf & "Please try again")
        End Try

        ' Find out what radio button was clicked to apply the compound frequency
        If rdoMonthly.Checked Then
            CompoundType = 12
        ElseIf rdoQuarterly.Checked Then
            CompoundType = 4
        ElseIf rdoSemiannually.Checked Then
            CompoundType = 2
        Else
            CompoundType = 1
        End If

        ' Get the number of periods
        Try
            Periods = CDbl(txtPeriods.Text)
        Catch ex As Exception
            MsgBox("The value you entered for the number of periods " & 
                   "is not valid" & vbCrLf & "Please try again")
        End Try

        ' These values will make the calculation easier to read
        Dim i As Double = InterestRate / CompoundType
        Dim n As Double = CompoundType * Periods

        ' Perform the necessary calculations
        RatePerPeriod = InterestRate / Periods
        FutureValue = Principal * Math.Pow(1 + i, n)
        interestEarned = FutureValue - Principal

        ' Display the values in the appropriate text boxes
        txtInterestEarned.Text = FormatCurrency(InterestEarned)
        txtFutureValue.Text = FormatCurrency(FutureValue)
End Sub
  9. Test the application
     
    Compound Interest - Results
  10. After using it, close the form and return to your programming environment

Compound Interest
 
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