Codify compound interest formulas

investment_compounding.py

#!/bin/env python3

# Formula Resources:
# https://www.omnicalculator.com/finance/compound-interest#example-2-complex-calculation-of-the-value-of-an-investment

def main():
    starting_balance = 5_000
    years_to_achieve = 1
    rate_of_return = 0.03
    compound_frequency = 12 # number of times compounded per year
    final_balance = 0

    # Below, in a through d, the formula is broken down into its individual steps
    a = 1 + (rate_of_return / compound_frequency)
    print(a)

    b = (compound_frequency * years_to_achieve)
    print(b)

    # How Python handles exponents
    # https://stackoverflow.com/questions/73577000/what-is-the-shorthand-way-of-raising-a-variable-to-the-power-of-in-python-3
    c = a ** b
    print(c)

    d = starting_balance * c
    print(d)

    # Final formula
    final_balance = starting_balance * (1 + (rate_of_return / compound_frequency)) ** (compound_frequency * years_to_achieve)
    print(final_balance)
    
if __name__ == "__main__":
    main()

investment_compounding_with_contributions.py

#!/bin/env python3

# Formula Resources:
# https://www.omnicalculator.com/finance/compound-interest#example-2-complex-calculation-of-the-value-of-an-investment
# https://structx.com/annual_compound_interest_with_contributions.html
# https://math.stackexchange.com/questions/4150453/compound-interest-with-regular-monthly-contributions-formula

def main():
    starting_balance = 10_000
    years_to_achieve = 10
    rate_of_return = 0.05
    compound_frequency = 12 # number of times compounded per year
    final_balance = 0
    amount_invested_monthly = 1_000

    # Below, in a through f, the formula is broken down into its individual steps
    a = 1 + (rate_of_return / compound_frequency)
    print(a)

    b = (compound_frequency * years_to_achieve)
    print(b)

    # How Python handles exponents
    # https://stackoverflow.com/questions/73577000/what-is-the-shorthand-way-of-raising-a-variable-to-the-power-of-in-python-3
    c = a ** b
    print(c)

    d = starting_balance * c
    print(d)

    # Steps e and f are specific to factoring in future contributions and are not required otherwise
    e = (c - 1) / (rate_of_return / compound_frequency)
    print(e)
    
    f = d + (amount_invested_monthly * e)
    print(f)

    # Final formula
    final_balance = starting_balance * (1 + (rate_of_return / compound_frequency)) ** (compound_frequency * years_to_achieve) + amount_invested_monthly * (((1 + (rate_of_return / compound_frequency)) ** (compound_frequency * years_to_achieve)) - 1) / (rate_of_return / compound_frequency)
    print(final_balance)
    
if __name__ == "__main__":
    main()