Challenge - Functions and loops

PHP course · Beginner · Lesson 115/116

Build an interest calculator with parameterized functions, loops and return.

Challenge - Functions and loops

In this challenge you'll write an interest calculator. The computeInterest(float $principal, float $rate, int $years) function computes compound interest with a for loop and returns the balance via return.

Each year the interest is added to the balance; the next year's interest is computed on the grown balance. This combines parameterized functions, loops and arithmetic operators.

for loop refresher

A for loop has three parts: initialization ($i = 0), condition ($i < $years) and increment ($i++). The body runs while the condition is true.

For compound interest you keep the balance in $balance and update it each step with $balance += $balance * ($rate / 100). When the loop ends, return $balance gives the result.

Exercise Write the interest calculator

Define computeInterest(float $principal, float $rate, int $years): float. In the body start with $balance = $principal. Open a for ($i = 0; $i < $years; $i++) loop; in the body write $balance += $balance * ($rate / 100). After the loop return $balance;. Finally add echo computeInterest(1000, 10, 3) . "\n";.

Show example solution

float. Start with $balance = $principal; loop over years with for, update with $balance += $balance * ($rate / 100); return $balance.
Example solution:
<?php
// Write computeInterest with a for loop
function computeInterest(float $principal, float $rate, int $years): float {
    $balance = $principal;
    for ($i = 0; $i < $years; $i++) {
        $balance += $balance * ($rate / 100);
    }
    return $balance;
}

echo computeInterest(1000, 10, 3) . "\n";

Test yourself

What happens each year in compound interest?
- Only the principal grows
- The rate halves
- Principal stays fixed, interest kept separate
- Interest is added to the balance, next interest is computed on it
Show answer

Interest is added to the balance, next interest is computed on it — Correct. Each year interest is added to the balance; the next year's interest is computed on the grown balance.

Complete the compound interest update

<?php
function computeInterest(float $principal, float $rate, int $years): float {
    $balance = $principal;
    for ($i = 0; $i < $years; $i++) {
        $balance ____= $balance * ($rate / 100);
    }
    return $balance;
}
?>

Show answer

<?php
function computeInterest(float $principal, float $rate, int $years): float {
    $balance = $principal;
    for ($i = 0; $i < $years; $i++) {
        $balance +== $balance * ($rate / 100);
    }
    return $balance;
}
?>

Match the interest calculator parts

$principal

principal
$rate

annual rate %
$years

year count
$balance

current balance

Challenge - Functions and loops