Calculating interest rates in Javascript: A guide to determining values using two separate rates

Question

Calculating interest rates in Javascript: A guide to determining values using two separate rates

I am currently working on an earnings calculator function

EarningsCalculator.prototype.calculateEarning = function (interestRate, investmentAmount) {

    var earningHistory = {};
    var currentInvestment = investmentAmount;
    for (var year = 1; year <= 20; year++) {

            earnedAmount = currentInvestment * interestRate;

            currentInvestment = currentInvestment + earnedAmount;

        if (year % 5 === 0 || year === 1) {
            earningHistory[year] = currentInvestment;
        }
    }

    return earningHistory;
}

This function takes an initial "investment amount" and calculates the earnings based on a given interest rate. The calculation is done for multiple years using a loop, but I want to modify it slightly. I need the earnings at 1-year intervals for the first year and then at 5-year intervals from year 5 onwards.

So with an initial investment of $1000 and an interest rate of 10%, the output for 20 years would look like this:

Year1  = $1100
Year5  = $1610.51
Year10 = $2593.74246
Year15 = $4177.248169
Year20 = $6727.499949

javascript calculator

Answer 1

Answer №1

If you want to calculate your earnings, you can use this formula.

function calculateEarnings(principal, rate, time) {
    return Math.pow(rate + 1, time) * principal;
}

var initialInvestment = 1000,
    annualInterestRate = 0.1,
    investmentPeriods = [1, 5, 10, 15, 20]
    
investmentPeriods.forEach(function (period) {
    console.log(period, calculateEarnings(initialInvestment, annualInterestRate, period));
});

Answer 2

If you want to calculate your earnings, you can use this formula.

function calculateEarnings(principal, rate, time) {
    return Math.pow(rate + 1, time) * principal;
}

var initialInvestment = 1000,
    annualInterestRate = 0.1,
    investmentPeriods = [1, 5, 10, 15, 20]
    
investmentPeriods.forEach(function (period) {
    console.log(period, calculateEarnings(initialInvestment, annualInterestRate, period));
});

Answer 3

Answer №2

To filter out only years divisible by 5 in your loop, you can use a modulus operation on the year values. Additionally, consider adding a condition to include the first year as well:

function EarningsCalculator (rate, investedValue) {

var earnings = {};
var currentState = investedValue;
var YEAR_INTERVAL = 5;
var YEARS_COMPOUNDING = 20;

for (var i = 1; i <= YEARS_COMPOUNDING; i++) {

        earning=currentState*rate;

        currentState = currentState + earning;
            if (i % YEAR_INTERVAL == 0 || i == 1) {
        earnings[i] = currentState;
    }
}

return earnings;
}

var earnings = [];
earnings = EarningsCalculator(.10,1000); 
console.log(earnings);

This implementation will output the correct values to your object when checked in the console.

An advantage of this approach is the flexibility to adjust the yearly interval by changing a variable rather than hardcoding specific values for different time periods.

JSFiddle: https://jsfiddle.net/kgill/zgmrtmhg/1/

Answer 4

To filter out only years divisible by 5 in your loop, you can use a modulus operation on the year values. Additionally, consider adding a condition to include the first year as well:

function EarningsCalculator (rate, investedValue) {

var earnings = {};
var currentState = investedValue;
var YEAR_INTERVAL = 5;
var YEARS_COMPOUNDING = 20;

for (var i = 1; i <= YEARS_COMPOUNDING; i++) {

        earning=currentState*rate;

        currentState = currentState + earning;
            if (i % YEAR_INTERVAL == 0 || i == 1) {
        earnings[i] = currentState;
    }
}

return earnings;
}

var earnings = [];
earnings = EarningsCalculator(.10,1000); 
console.log(earnings);

This implementation will output the correct values to your object when checked in the console.

An advantage of this approach is the flexibility to adjust the yearly interval by changing a variable rather than hardcoding specific values for different time periods.

JSFiddle: https://jsfiddle.net/kgill/zgmrtmhg/1/

Calculating interest rates in Javascript: A guide to determining values using two separate rates

Answer №1

Answer №2

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