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How doI write a Programmer Defined Function that Computes a Future Value

Posted on 1998-10-15
Medium Priority
Last Modified: 2010-04-30
I am doing a project that has to contain a Programmer Defined Function that Calculates a Future value. the formula I was given is;
 FV = PV *  (1+ (i/m)) m*y        ('m*y are exponents)
PV=Present value
i=Annual Interest rate
m=Number of Compounding Periods Per Year
y=Number of years

Here is what I have;

  'This Project will compute the Future Value of a given Present
  'Value Amount.
  Option Explicit

Private Sub Cmd_ComputeFutureValue_Click()
  'This compute's the Future Value.
  Dim Exponent As Double
  Dim FutureValue As Currency
  Dim InterestRate As Double
  Dim NumberOfYears As Integer
  Dim PeriodsPerYear As Integer
  Dim PresentValue As Currency
  PeriodsPerYear = Val(Txt_InputPmtPeriodsPerYear.Text)
  InterestRate = Val(Format$(Txt_InputAnnualInterest.Text, "#0.00"))
  NumberOfYears = Val(Txt_InputNumberOfYears.Text)
  PresentValue = Val(Txt_InputPresentValue.Text)
  Exponent = Exp(PeriodsPerYear * NumberOfYears)
  FutureValue = PresentValue * (1 + (InterestRate / PeriodsPerYear))  ^ Exponent
  Lbl_ShowFutureValue.Caption = Format$(FutureValue, "Currency")
End Sub 'Cmd_ComputefutureValue_Click

Private Sub Form_Load()
  'This shows all Text Boxes clear at start of Program
  Txt_InputAnnualInterest.Text = ""
  Txt_InputNumberOfYears.Text = ""
  Txt_InputPmtPeriodsPerYear = ""
  Txt_InputPresentValue.Text = ""
  Lbl_ShowFutureValue.Caption = ""
End Sub 'Form_Load

Here is what I get when I enter my values,
 for present value; 1
 for annual interest rate; 10
 for payment periods per Year; 12
 for Number of years; 1
 I get the result for future value as, $1.83
 I know the Ansewer should be $1.10

 I Think one of the Problems is that the Interest Rate is not using the decimal. And The Exponent of m*y (Number of Compuonding Periods Per Year * Number of Years) Isnt being used Correctly.
 How do I fix this In the Code?
And How would I Write it in a Programmer Defined Function?
Question by:katdude
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Expert Comment

ID: 1440106
increase the points and somebody (may be myself) will definitely take a look in to your source code.

Accepted Solution

clifABB earned 40 total points
ID: 1440107
You don't need to increase your points.

When I run your code, I get an overflow when calculating FutureValue (the exponent is too high).

However, I believe you need to divide your intrest value by 100 to get the correct amount:
  InterestRate = Val(Format$(Txt_InputAnnualInterest.Text / 100, "#0.00"))

Also, check out the FV function in the VB help file.

Expert Comment

ID: 1440108

1)  A User-Defined Function is a function that you create that does something you need done.  It is exactly like a Sub, but you can assign it a return value which you can't do to a Sub.  
For example :

Private Function MyFunction(AreYouHappy As Boolean) As String
  If AreYouHappy = True then
    MyFunction = "You Are Happy!"
    MyFunction = "You Are Not Happy!"
  End If
End Function

2)  It's no wonder why your code didn't work.  You've got the variables declared wrong, you're using the Format() function incorrectly, you forgot to devide by 100 to get percent integer, and MOST IMPORTANT, your equation is wrong!

I tried to mess around with your code some and cleaned it up some, but you need to get the right equation before you can even hope for it to work right.  Here's what I had :

'This Project will compute the Future Value of a given Present
'Value Amount.
Option Explicit

Private Sub Cmd_ComputeFutureValue_Click()
On Error Resume Next

'  FVal = PVal * (1 + (i / m)) m * y   <--  This Equation Is Wrong
'  PVal = Present value
'  i  = Annual Interest rate
'  m  = Number of Compounding Periods Per Year
'  y  = Number of years
  Dim FVal As Double
  Dim PVal As Double
  Dim i As Double
  Dim m As Double
  Dim y As Double
  PVal = CDbl(Txt_InputPresentValue.Text)
  i = CDbl(Txt_InputAnnualInterest.Text) / 100
  m = CDbl(Txt_InputPmtPeriodsPerYear.Text)
  y = CDbl(Txt_InputNumberOfYears.Text)
  Lbl_ShowFutureValue.Caption = Format(FVal, "Currency")
End Sub

Private Sub Form_Load()

  'This shows all Text Boxes clear at start of Program
  '(This code not needed - Just set the Text at Design Time)
'  Txt_InputAnnualInterest.Text = ""
'  Txt_InputNumberOfYears.Text = ""
'  Txt_InputPmtPeriodsPerYear.Text = ""
'  Txt_InputPresentValue.Text = ""
'  Lbl_ShowFutureValue.Caption = ""

End Sub 'Form_Load

Also, as clifABB stated, you can use VB pre-defined functions to figure this one out.  Look up either FV() as was stated previously, or PMT().

Hope that helps, and hope you give me some points for my time.  =]


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