Java The Complete Reference, Seventh Edition

944 Part IV: Applying Java

The formula to compute an initial investment is shown here:

Initial Investment =targetValue/ (((rateOfRet/compPerYear) + 1)compPerYear*numYears)

whererateOfRetspecifies the rate of return,targetValuecontains the starting balance,compPerYear

specifies the number of compounding periods per year, andnumYearsspecifies the length of

the investment in years. If you use an annualized rate of return forrateOfRet,then the

number of compounding periods is 1.

The following applet calledInitInvuses the preceding formula to compute the initial

investment required to reach a desired future value. The applet produced by this program

is shown in Figure 32-3.

/* Compute the initial investment necessary for

a specified future value. */

import java.awt.*;

import java.awt.event.*;

import javax.swing.*;

import java.text.*;

/*

<applet code="InitInv" width=340 height=240>

</applet>

*/

public class InitInv extends JApplet

implements ActionListener {

JTextField targetText, initialText, periodText,

rateText, compText;

JButton doIt;

double targetValue; // original targetValue

double rateOfRet; // rate of return

double numYears; // length of loan in years

int compPerYear; // number of compoundings per year

NumberFormat nf;

FIGURE 32-3

TheInitInvapplet