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dataxspy

Calculating compound interest

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Posted (edited)

I tried using a for loop but I'm trying to think of a way to calculate interest for a number of years but after I have the amount of interest for one year I'm unsure of how to add the interest to the principle then calculate it again for the next year, to hold that number like $Principle + $Interest = $NewPrinciple then $NewPrinciple + $Interest for multiple years.  

<?php
if (isset($_POST['submit'])) {
	$InvestmentFrequency = $_POST['InvestmentFrequency'];
	$CompoundFrequency = $_POST['CompoundFrequency'];
	$InitialInvestment = preg_replace("/[^0-9]/", '', $_POST['InitialInvestment']);
	$Contributions = preg_replace("/[^0-9]/", '', $_POST['Contributions']);
	$InvestmentLength = preg_replace("/[^0-9]/", '', $_POST['InvestmentLength']);
	$InterestRate =  $_POST['InterestRate'];
	
	if ($InvestmentFrequency == "Weekly") {
	$InvestmentFrequency = "52";
	} elseif ($InvestmentFrequency == "Monthly") {
	$InvestmentFrequency = "12";
	} else {
	$InvestmentFrequency = "1";
	}
	
	if ($CompoundFrequency == "Annually") {
	$CompoundFrequency = "1";
	} elseif ($CompoundFrequency == "Semiannually") {
	$CompoundFrequency = "2";
	} elseif ($CompoundFrequency == "Monthly") {
	$CompoundFrequency = "12";
	} elseif ($CompoundFrequency == "Weekly") {
	$CompoundFrequency = "52";
	} else {
	$CompoundFrequency = "365";
	}
	
	if ($CompoundFrequency == "1") {
	$AdditionalInvestments = $Contributions * $InvestmentFrequency;
	$Principle = $InitialInvestment + $AdditionalInvestments;
	$Interest = $Principle * $InterestRate;
	$NewPrinciple = $Principle + $Interest;
	
		for ($x = 0; $x <= $InvestmentLength; $x++){
			echo "$x - $NewPrinciple</br>";
		}
	}
	
}

This is the output I get the principle and interest added together for the number of years I entered.

fff.png

Edited by dataxspy

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Posted (edited)

Adapt the standard compound interest formula:

A=P(1+r/n)^(nt)

Where:

A= amount

P=principle

r= interest rate

n= number of compoundings per year

t= number of time periods

For continuous compounding use:

A=Pe^(rt)

Where:

t=time in years (can be a fraction)

e= mathematical constant (2.71828)

Edited by gw1500se

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