Hw $3$: Critical thinking, communication, and Empirical $^$ Quantative skills

Due: $\frac{8}{12}\frac{?}{24}$

Loan Sharks and Compound Interest

We use computers to solve problems. But you can't program a computer to do something that you don't know how to do yourself. In this short activity, you're going to break down and explain the math behind a simple, real$-$world problem, and write a function to implement it$.$ To complete this assignment, write out your answers in a separate text file and submit through blackboard.

The Problem: You're back in $3$rd grade without a care in the world, but you really, really want that sweet pencil box at the Scholastic Book Fair $-$ the one with the awesome spray paint design and the seven different compartments. But there is no way your parents are springing for that. Fortunately, your friend Stan is willing to loan you $$20!$ Pretty soon you're rocking the coolest pencil box in class, and you just have to remember to pay Stan back next week.

Now, Stan is the entrepreneurial type, so he told you that you just have to pay him $25\%$ interest on that little loan. $($Bear with us here as we start simple and work our way up$).$

How much do you have to pay Stan next week?

Please explain what each component of the equation used to calculate the value represents.

Explain why you used that equation. What initial assumptions did you make to choose the equation?

But wait! It turns out Stan isn't that great a friend. That $25\%$ interest? He specified that it is compounded daily, and he had you sign this chart when he loaned you the money. According to Stan, $25\%$ over $7$ days is $3\mathrm{.}5714\%$ per day.

How much do you have to pay Stan next week, according to this chart?

Explain your rationale to determine the value $($i$.$e$.,$ how do you interpret the chart?$)$ please.

How did Stan come up with that number? Why is it more than $25\%$ of $$20?$

Explain which equations are needed to calculate the value, and the data and assumptions that are involved in the calculations.

Now, Stan may just be being a picky jerk here, but people make similar deals with credit card and mortgage companies every day. And while the extra change might not seem like much, it's almost $3\%$ of the original loan amount. On a $$5000$ credit card balance or $$150,000$ home loan, that's no small fee.

Write the Python functions discribed below to solve the type of problem you just went through. They should take an initial loan amount, a number of days until payback, and the interest rate. They should return the total amount to pay back, assuming that the interest is compounded daily over the days until payback.

Your explanation in question $4$ should guide you in how the functions should be written.

Note: your explanations do not need to be very long, but they must be clear, well organized, spelling proofed, and well argued.

Grading criteria

You start with $100$ points and then lose points as you don't do something that is required.

$-10$: Incorrect$/$poor answer to question $1$

$-20$: Incorrect$/$ poor answer to question $2$

$-20$: Incorrect$/$ poor answer to question $3$

$-20$: Incorrect$/$ poor answer to question $4$

$-30$: Incorrect$/$incomplete function

$-100$: The code submitted is not your creation $($you got it from a web site or another person$)$

$-100$: The anwers submitted are not your creation $($you got them from a web site or another person$)$

$-100$: No submission.

$-10$: Late.

Mandatory:

In the main program:

Get the input data entered using the keyboard. Use real numbers for amounts and interest rates. Use integers for the number of days.

Call function fair$\_$loan$()$ to calculate the payback amount to using a fair method.

Call function shark$\_$loan$()$ to calculate the payback amount to using Stan's method.

Compare both values and display how much more you will pay using the more expensive loan.

Display the real numbers using $7$ columns with three decimal digits. Follow the formats shown in my sample runs.

You need to define the following value$-$returning functions to implement this solution:

Hw $3$: Critical thinking, communication, and Empirical $^$ Quantative skills

Due: $\frac{8}{12}\frac{?}{24}$

Loan Sharks and Compound Interest

We use computers to solve problems. But you can't program a computer to do something that you don't know how to do yourself. In this short activity, you're going to break down and explain the math behind a simple, real$-$world problem, and write a function to implement it$.$ To complete this assignment, write out your answers in a separate text file and submit through blackboard.

The Problem: You're back in $3$rd grade without a care in the world, but you really, really want that sweet pencil box at the Scholastic Book Fair $-$ the one with the awesome spray paint design and the seven different compartments. But there is no way your parents are springing for that. Fortunat