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Loan Payment Calculator Project

The document outlines a Python programming project for creating a loan payment calculator for Adam, who is considering a $20,000 loan with a 5% interest rate over five years. The program must prompt for loan details, calculate the monthly payment, total loan cost, and total interest paid using a specified formula. Deliverables include a Python script and a brief report on the program's functionality and assumptions.

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8 views2 pages

Loan Payment Calculator Project

The document outlines a Python programming project for creating a loan payment calculator for Adam, who is considering a $20,000 loan with a 5% interest rate over five years. The program must prompt for loan details, calculate the monthly payment, total loan cost, and total interest paid using a specified formula. Deliverables include a Python script and a brief report on the program's functionality and assumptions.

Uploaded by

abdoen.psn
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Python Programming Project: Loan Payment Calculator

Background:

Adam is planning to start a small business and is considering taking out a loan. He is evaluating a

loan of $20,000 with an annual interest rate of 5% for a term of five years. Adam needs a program to

help him calculate various aspects of the loan to better understand the financial commitment.

Task:

Your task is to design and implement a Python program that can:

1. Prompt Adam for the principal amount of the loan, the interest rate per annum, and the term of

the loan in years.

2. Calculate and display:

- The monthly payment he needs to make.

- The total cost of the loan at the end of the term.

- The total interest paid over the life of the loan.

Requirements:

- Input: Your program should be able to accept decimal values for the amount and interest rate, and

an integer for the loan term.

- Output: The program should clearly print out the monthly loan payment, the total cost of the loan,

and the total interest paid.

Formula to Use:

The monthly loan payment can be calculated using the formula:

Payment = (iP) / (1 - (1 + i)^-n)

Where:
- P = principal (the amount borrowed)

- i = monthly interest rate (annual rate / 12 / 100)

- n = total number of payments (loan term in years * 12)

Example Execution:

Enter the loan amount ($): 20000

Enter the annual interest rate (%): 5

Enter the loan term (years): 5

Monthly Payment: $377.42

Total Cost of the Loan: $22645.20

Total Interest Paid: $2645.20

Deliverables:

- Python script file containing the code.

- A brief report explaining how the program works and any assumptions made during

implementation.

Evaluation Criteria:

- Functionality: The program must correctly calculate and display the required outputs.

- User Interaction: The program must effectively prompt for and handle user inputs.

- Code Quality: Code should be well-commented, organized, and efficiently implement the task.

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