ECE-1021
HOMEWORK #8
(Last Mod: 27 November 2010 21:38:40 )
People use - and abuse - credit on a daily basis. When it comes to credit, there are a number of interesting and informative questions that can be asked. For instance, say you purchase an item on a revolving credit account (e.g., a credit card). Most people do this all the time without giving it much thought - but they might give it a thought if they knew how much they were truly going to pay for that item by the time they pay it off, especially if they only make the minimum payments.
The repayment terms for most credit cards are similar to the following:
The starting balance is simply the previous month's ending balance.
If the payment received is not equal to the starting balance, then a finance charge is assessed. This charge is equal to the starting balance multiplied by the monthly periodic rate which is simply the Annual Periodic Rate (APR) divided by twelve.
Your new balance is the old balance plus any finance charges, plus any new charges, minus any payments.
Your minimum payment is one of three values:
A specific fraction of the new balance (typically between 2% and 3%).
An absolute minimum (typically between $10 and $20) if this is greater than the payment amount due under the first rule.
The remaining balance if it is less than the absolute minimum.
Your program should print a month-by-month table for the activity on a credit card due to a single high ticket purchase. Your program should ask the User for the Credit Card terms - namely the APR, the minimum payment percentage, and the absolute minimum payment amount. Your program should ten ask the user for the cost of the item they have purchased using that card.
With that information your program should print a Table of Payments where each line represents one month's activity giving the month number and the basic information that would be on the statement for that month, namely the old balance, the finance charges, the payment credited, the new balance, and the minimum payment due.
For our purposes, we will assume that there are no new purchases after the initial purchase (since we want to find out how much a specific purchase is going to cost us) and that the payment each month is simply the minimum payment determined in the prior month (a pretty good assumption in the case of many people). Therefore the new balance (upon which the minimum payment is calculated) is the old balance plus one month's interest on that balance minus the minimum payment due (calculated the prior month).
Once the item is paid off, you should print a summary that gives the following information:
The original purchase amount, the total number of months required to pay off the purchase, the total amount of the finance charges, and the total cost of the purchased item.
Using your program, see how much the following item would end up costing you:
Purchase price: $2500
Interest Rate: 17.9% APR
Minimum Payment: 2% or $10 whichever is greater.
Note that the above is test data that you should enter in response to prompts from your program. Your program should NOT hardcode ANY of the values in the above example.