Question

1. When you borrow money to buy a house, a car, or for some other purpose, you repay the loan by making periodic payments over a certain period of time. Of course, the lending company will charge interest on the loan. Every periodic payment consists of the interest on the loan and the payment toward the principal amount. To be specific, suppose that you borrow $1,000 at an interest rate of 7.2% per year and the payments are monthly. Suppose that your monthly payment is $25. Now, the interest is 7.2% per year and the payments are monthly, so the interest rate per month is 7.2 / 12 = 0.6%. The first month’s interest on $1,000 is 1000 * 0.006 = 6. Because the payment is $25 and the interest for the first month is $6, the payment toward the principal amount is 25 - 6 = 19. This means after making the first payment, the loan amount is 1,000 - 19 = 981. For the second payment, the interest is calculated on $981. So, the interest for the second month is :

981 *0.006 = 5.886, that is, approximately $5.89. This implies that the payment toward the principal is 25 - 5.89 = 19.11 and the remaining balance after the second payment is 981 - 19.11 = 961.89.

This process is repeated until the loan is paid. Write a program that accepts as input the loan amount, the interest rate per year, and the monthly payment. (Enter the interest rate as a percentage. For example, if the interest rate is 7.2% per year, then enter 7.2.) The program then out- puts the number of months it would take to repay the loan. (Note that if the monthly payment is less than the first month’s interest, then after each payment, the loan amount will increase. In this case, the program must warn the borrower that the monthly payment is too low, and with this monthly payment, the loan amount could not be repaid.)

2. Enhance your part 1 program first telling the user the minimum monthly payment and then prompting the user to enter the monthly payment. Your last payment might be more than the remaining loan amount and interest on it. In this case, output the loan amount before the last payment and the actual amount of the last payment. Also, output the total interest paid.

C++

Answer 1

A.

#include<iostream>
using namespace std;
main()
{
float loan;
int months = 0;
float rate, monthpay, mrate;
cout<<"Enter the loan amount: ";
cin>>loan;
cout<<"Enter the monthly pay: ";
cin>>monthpay;
cout<<"Enter the rate of interest per annum: ";
do {
cin>>rate;
mrate = rate / 12;
if(monthpay < loan * (mrate / 100))
{
cout<<"The monthly payment is too low, and with this monthly payment, the loan amount could not be repaid. Please re-enter new monthly pay:\n";
}
}while(monthpay < loan * (mrate / 100));
while(loan > 0)
{
months++;
loan = loan - (monthpay - loan * (mrate / 100));
}
cout<<"No. of months required to repay the loan is "<<months<<" months";

}

B.

#include<iostream>
using namespace std;
main()
{
float loan;
int months = 0;
float rate, monthpay, mrate, totinterest = 0.0;
cout<<"Enter the loan amount: ";
cin>>loan;
cout<<"Enter the rate of interest per annum: ";
cin>>rate;
mrate = rate / 12;
cout<<"Minimum monthly pay must be: "<<loan * (mrate / 100)<<endl;
cout<<"Enter the monthly pay: ";
cin>>monthpay;

while(loan > 0)
{
months++;
totinterest += loan * (mrate / 100);
if(loan - (monthpay - loan * (mrate / 100)) < 0)
{
cout<<"Loan amount before last payment is: "<<loan<<endl;
cout<<"Actual payment on last month: "<<loan + (loan * (mrate / 100))<<endl;
}
loan = loan - (monthpay - loan * (mrate / 100));
}
cout<<"No. of months required to repay the loan is "<<months<<" months"<<endl;
cout<<"Total interest paid: "<<totinterest<<endl;

}

Answer 2

Code has been posted here:

#include<iostream>

using namespace std;

int main(){

   float principal, i_rate_annum, monthly_interest, monthly_interest_temp, monthly_pay, effective_monthly_pay;
   float temp, total_interest;
   int number_of_months = 0;

   cout<<"Enter Loan Details: \n";
   cout<<"Enter Principal Amount: ";
   cin>>principal;
   cout<<"Enter interest rate per annum in %: ";
   cin>>i_rate_annum;
   cout<<"Enter monthly repay: ";
   cin>>monthly_pay;
  
   monthly_interest_temp = ((i_rate_annum/12)*principal)/100;
  
   if(monthly_interest_temp > monthly_pay){
       cout<<"Monthly payment "<<monthly_pay<<"$ is too low, the loan amount could not be repaid\n";
      
       //Part B suggesting borrower to enter monthly payment more than the monthly interest rate
       cout<<"You better pay monthly payment more than Monthly interest rate " <<monthly_interest_temp<<"$\n";
  
       cout<<"Re-Enter monthly repay: ";
       cin>>monthly_pay;
      
   }
  
   temp = principal;
  
   while(1){
  
       //Calculating monthly intest and monthly pay towards loan amount
       monthly_interest = ((i_rate_annum/12)*principal)/100;      
       effective_monthly_pay = monthly_pay - monthly_interest;
       principal -= effective_monthly_pay;
      
       if(principal <= 0)
           break;
      
       //If last month payment is more than the remaining loan amount
       //Suggesting borrower to enter only the remaining money
       if(monthly_pay > principal){
           cout<<"Remaining principal amount "<<principal<< "$ is less than the monthly pay " <<monthly_pay<<"$\n";
           cout<<"Pay "<<monthly_interest+principal<<"$\n";
          
           cout<<"Re-Enter monthly repay equal to "<<monthly_interest+principal<<": ";
           cin>>monthly_pay;
       }
      
       number_of_months++;
       total_interest += monthly_interest;
  
   }  
  
   cout<<"Number of months the loan to be paid "<<number_of_months <<"\n";
   cout<<"Total Interest to be paid "<<total_interest <<"$\n";

   return 0;
}

Output screenshot:

Code Screenshot:

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