Title: Financial Calculation using .net - Part 1 How much will I get after X months ?
Author: Shivprasad Koirala
Email: shiv_koirala@yahoo.com
Language: .net Interview Questions
Level: Beginner
Description: Financial Calculation using .net - Part 1
Financial Calculation using .net
Introduction
Understanding the
future value fundamental
In finance world many times we need to calculate general
financial calculation like interest calculation, regression analysis, internal
rate of return etc. .NET does not provide readymade functions for these regular
financial functionalities. Building these functionalities from scratch is not a
big thing but testing it end to end with different scenarios is a challenge. We
will try to understand how we can reuse 'Financial' classes from
Microsoft.VisualBasic namespace. These functions are time tested and you do not
need to code from scratch.
In this part we will understand how we can calculate the
future value for a given rate of interest, period and monthly invested amount.
I have uploaded a sample source code which has a simple UI
to calculate the future value.
I have been writing and recording lot of architecture
related videos on design patterns, UML, FPA estimation, C# projects etc you can
watch my videos on http://www.questpond.com
First let’s understand how future values are calculated in finance domain.
Let’s say you have decided to invest for two year in some scheme. Let’s say the
amount is 1000 (I am not thinking in terms of INR, $ or pounds) at rate of
interest of 10%. So for the first month you will invest 1000 with 10% interest
in the second month you will get 1100. Now in second month you invest 1000, so
the total is 1000 + 1100. Now the rate of interest on 2100 is 210. So after two
months you will get 2310.
The above calculation is nothing but future value
calculation. This is available as a readymade function in
‘Microsoft.VisualBasic’ namespace. Once you import the name space you will get a
‘Financial’ static class which has a ‘FV’ function. This function takes in rate
of interest , number of months and amount per month. Once we give this it
calculates the value you will get after the defined period. I have wrapped the
‘Financial.FV’ function in a class ‘ClsFutureValue’.
Click here to download
the source code attached with this article to see how the FV function works.
Below is the screen shot of the sample project.
