Problem Set 7: Down Payment

Task Outline

• Due Date: Monday, November 4, 2019
• Total Points: 10
• Implement a Java program that determines how many months it will take to save up enough money for a down payment on a house.

Background Theory

• Let's assume that you have grown weary of living in dormitories, and you wish to save up enough money for a down payment on a house. The down payment is 25% of the the total cost of the house.
• Since housing is very expensive, it will probably take you several years to accomplish this task. In this program, we will measure this time duration in terms of months.
• Let's also assume that you have a well-paying job, in which you earn a respectable annual salary. As well, you have a savings account which generates an annual rate of return.
• Furthermore, your place of employment provides you with pay raises on a semi-annual basis. That is, your salary will increase by a certain decimal percentage after the 6th month, the 12th month, the 18th month, and so on.

Parameters

• The following is an explanation of the parameters used in the savingsDuration() function:

annualsalary

• This is the annual salary which you earn from your job.

percentsaved

• This is the amount of your salary which you will dedicate towards saving for the down payment. It should be expressed in decimal form, for example: 0.1

totalcost

• This is the purchase price of your dream home.

payraise

• This is the amount by which your salary is increased, and these raises occur every six months. This should be expressed in decimal form, for example: 0.1

Hints

• You will need to determine the amount of the down payment, which can be calculated from: totalCost*0.25
• Since the time duration is measured in months, you will need to determine your monthly salary. This can be calculated from: annualSalary/12.0
• The amount that you have saved so far should be referred to as your current savings, and you begin with a current savings of: 0
• Assume that your savings account generates an annual rate of return of 4%. In other words, rate = 0.04
• Create a variable that keeps track of the number of months that have occurred in this simulation, and set this variable to: 0
• Assume that you invest your current savings wisely, so at the end of each month, you receive an additional currentSavings*rate/12.0 to be put into your savings.
• Be careful about when you increase your salary due to the pay raise. This should only happen after the 6th month, 12th month, 18th month, and so on.

Code Distribution

Description	File Size	File Name
Java Source Code for Down Payment	5.2KB	pset07.zip

Contents of pset07.zip:

PSet07DownPayment/
├── DownPayment.class
├── DownPayment.ctxt
├── DownPayment.java
├── DownPaymentJUnitTest.class
├── DownPaymentJUnitTest.ctxt
├── DownPaymentJUnitTest.java
├── package.bluej
└── README.TXT

Specification

• Write a Java program in the file DownPayment.java that outputs the number of months that would be required to save enough money for a down payment on a house, given the annual salary that you earn, and the return on your investments.
• You will write your solution in a function called savingsDuration(double annualSalary, double percentSaved, double totalCost, double payRaise) right below the place where it says: YOUR CODE HERE
• When the function call savingsDuration(120000, 0.05, 500000, 0.03) is executed, the output of the program should be: 142

Testing

• Click on the Run Tests button to execute the JUnit test bench. JUnit indicates a successful test with a green bar, and an unsuccessful test with a red bar.

Submission

• Upload the file DownPayment.java to the Web-CAT automated grading platform.