Calculating simple interest
Learning to calculate simple interest is an important first step in building up to calculating the price of a bond.
Here you will apply what you have learned to calculate simple interest on a savings account.
A savings account offers a 3% interest rate (simple interest) per year paid yearly. You decide to invest USD 10,000 in this account for a period of 10 years.
This exercise is part of the course
Bond Valuation and Analysis in Python
Exercise instructions
- Assign the present value, rate, and number of periods to
pv,r, andn, respectively. - Using the formula for simple interest, calculate and print the total amount of simple interest earned after 10 years.
- Calculate and print the value of the account after 10 years.
Hands-on interactive exercise
Have a go at this exercise by completing this sample code.
# Assign present value, rate and number of periods
pv = ____
r = ____
n = ____
# Calculate total amount of simple interest earned
simple_interest = ____
print(simple_interest)
# Calculate value of the savings account
fv = ____
print(fv)