3.14 Using Type Decimal for Monetary Amounts

• Python’s built-in floating-point numbers work well for most applications.
• Floating-point values are stored in binary format.
• Some floating-point values are represented only approximately when they’re converted to binary.

amount = 112.31

print(amount)

112.31

• Print amount with 20 digits of precision to the right of the decimal point to see that the actual floating-point value in memory is not exactly 112.31—it’s only an approximation:

print(f'{amount:.20f}')

112.31000000000000227374

• The Python Standard Library provides many predefined capabilities you can use in your Python code to avoid “reinventing the wheel.”
• Type Decimal, which uses a special coding scheme to solve the problem of to-the-penny precision.
  • Banks also have to deal with issues like using a fair rounding algorithm when calculating daily interest on accounts—type Decimal offers such capabilities.

Importing Type Decimal from the decimal Module

• The Python Standard Library is divided into groups of related capabilities called modules.
• The decimal module defines type Decimal and its capabilities.
• Must import to use capabilities from a module.

from decimal import Decimal

Creating Decimals

• Typically create a Decimal from a string.

principal = Decimal('1000.00')

principal

Decimal('1000.00')

rate = Decimal('0.05')

rate

Decimal('0.05')

Decimal Arithmetic

• Decimals support the standard arithmetic operators and augmented assignments.

x = Decimal('10.5')

y = Decimal('2')

x + y

Decimal('12.5')

x // y

Decimal('5')

x += y

x

Decimal('12.5')

• May perform arithmetic between Decimals and integers, but not between Decimals and floating-point numbers.

Compound-Interest Problem Requirements Statement

Requirements statement:

A person invests $1000 in a savings account yielding 5% interest. Assuming that the person leaves all interest on deposit in the account, calculate and display the amount of money in the account at the end of each year for 10 years. Use the following formula for determining these amounts:

a = p(1 + r)ⁿ

where

p is the original amount invested (i.e., the principal),

r is the annual interest rate,

n is the number of years and

a is the amount on deposit at the end of the n ^th year.

Calculating Compound Interest

• For each year, the loop displays a formatted string containing the year number and the amount on deposit at the end of that year

for year in range(1, 11):
    amount = principal * (1 + rate) ** year 
    print(f'{year:>2}{amount:>10.2f}')

 1   1050.00
 2   1102.50
 3   1157.62
 4   1215.51
 5   1276.28
 6   1340.10
 7   1407.10
 8   1477.46
 9   1551.33
10   1628.89

Formatting the Year and Amount on Deposit

print(f'{year:>2}{amount:>10.2f}')

• Uses an f-string with two placeholders to format the loop’s output.

{year:>2}

• Uses the format specifier >2 to indicate that year’s value should be right aligned (>) in a field of width 2
• The field width specifies the number of character positions to use when displaying the value.

• Can left align values with <.

{amount:>10.2f}

• Formats amount as a floating-point number (f) right aligned (>) in a field width of 10 with a decimal point and two digits to the right of the decimal point (.2).

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