Industrial and Operations Engineering

The University of Michigan

IOE 373: Homework 3

FINANCIAL APPLICATIONS CALCULATOR

Background

As an IOE student you have already taken IOE 201, Engineering Economics. You may also take IOE 452 (Corporate Finance), IOE 453 (Derivative Instruments), and/or ACC 471 (Accounting Principles). These are all courses which strengthen your financial acumen. Corporations are driven by their finances and bottom lines. It is crucial that IOE’s understand the basic financial topics such as present and future value, annuities and perpetuities, interest rates, and bond pricing.

Assignment

Your assignment for this homework is to create a Financial Calculator. The financial calculator will have a few windows. The main window, which should appear upon start-up, is the Time Value of Money Calculator. This form should allow the user to enter:

Type of calculation to perform: Include Present Value of single payment, annuity, perpetuity, growing annuity, and growing perpetuity; Future value of a single amount and annuity.Think of a drop-down list of options.
Interest type: Periodic or Continuous (note these are mutually exclusive)
Appropriate input values based on the type of calculation to perform

The form should output the value that the user requested after the user submits the values.

This form should have a menu bar with three main options: File, Applications, and Help.

Under the File option, you should have a reset option which resets all the values in the form, and a quit option which closes the form.

In Applications, you will have options for four windows:

Financial Calculator
Rule of 72
Income Calculator
Bond Pricing

You will make new forms for the last three items here, which are discussed on the next page.

Finally, the Help branch will contain two options: Help contents, which describe what the user should do, and About, which describes the author of the program. Both options should create informative message boxes to deliver this information.

The Applications

Rule of 72

If you are unfamiliar with the Rule of 72:

Create a form that allows the user to input the interest rate, and you will then output the estimate of time based on the rule, as well as the exact amount based on calculation. Assume continuous compounding.

Income Calculator

Create a form that allows the user to input any ONE of the following:

Hourly wage
Daily rate
Weekly rate
Monthly rate
Annual salary

Based on the ONE given input, your job is to fill in the rest of the information.

Bond Pricing

For information about how to price bonds:

Here is a general idea of what you need to have:

User inputs the years, the stated interest rate, the market’s desired rate, and the principle of the bond
Output the price of the bond

The price of the bond = Present value of the annuity of interest payments (based on stated interest rate) discounted to present based on market interest rate + Present value of the principle of the bond based on the market interest rate. Assume semiannual interest payments.

Each of the applications above should have the same menu bar as the main Financial Calculator, but with different Help informationbased on the program.

General Information

As a general rule, you should make an attempt to safeguard against bad user input.

You should also make the forms’ size locked, i.e., do not allow the user to change the size of the forms.

As always, making the forms attractive and user-friendly are a plus!

You must have Option Strict and ExplicitON; otherwise you will receive a 0.

Controls used:

Select Case
Menu
ComboBox
Creating new forms
Radioboxes
Dynamic change of labels
Control enabling/disabling
GroupBox
Locking a form to prevent resize/location change
Option Explicit, Strict ON

Finance Applications Calculator

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