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Regarding banking software

 
 
bob smith
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      10-02-2012
On Monday, October 1, 2012 6:44:33 PM UTC-5, Arne Vajh°j wrote:
> On 10/1/2012 4:10 PM, bob smith wrote:
>
> > On Sunday, September 30, 2012 11:25:35 PM UTC-5, Navnath Gadakh wrote:

>
> >> i am new to java and i want to develop one banking software in how start and what framework or shall i use plan java plz help?

>
> >

>
> > It sounds like you will want to use Swing with a MySQL backend.

>
>
>
> It is one UI and one database, but there are plenty of alternatives.
>
>
>
> > Also, be careful with float and double rounding errors.

>
>
>
> Better just avoid float and double completely when dealing with money!


And how will you be calculating interest ?


>
>
>
> Arne

 
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bob smith
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      10-02-2012
On Tuesday, October 2, 2012 11:20:03 AM UTC-5, Peter Duniho wrote:
> On Tue, 2 Oct 2012 07:18:51 -0700 (PDT), bob smith wrote:
>
>
>
> > [...]

>
> >> Better just avoid float and double completely when dealing with money!

>
> >

>
> > And how will you be calculating interest ?

>
>
>
> With a proper decimal numeric format. E.g. BigDecimal. These exist
>
> precisely because of this specific issue.


Don't you need to be able to raise to a floating point power for interest? (i.e. not an integer)
 
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bob smith
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      10-02-2012
On Tuesday, October 2, 2012 2:05:00 PM UTC-5, Peter Duniho wrote:
> On Tue, 2 Oct 2012 11:59:01 -0700 (PDT), bob smith wrote:
>
>
>
> > On Tuesday, October 2, 2012 11:20:03 AM UTC-5, Peter Duniho wrote:

>
> >> On Tue, 2 Oct 2012 07:18:51 -0700 (PDT), bob smith wrote:

>
> >>

>
> >>

>
> >>

>
> >>> [...]

>
> >>

>
> >>>> Better just avoid float and double completely when dealing with money!

>
> >>

>
> >>> And how will you be calculating interest ?

>
> >>

>
> >> With a proper decimal numeric format. E.g. BigDecimal. These exist

>
> >>

>
> >> precisely because of this specific issue.

>
> >

>
> > Don't you need to be able to raise to a floating point power for interest? (i.e. not an integer)

>
>
>
> For example?
>
>
>
> All my banks simply compute simple interest periodically, compounding as
>
> necessary. It's straight multiplication, no exponents necessary.
>
>
>
> When is a "floating point power" needed? And if it's needed, what is to
>
> preclude one from writing a proper decimal implementation rather than
>
> improperly using float or double for financial computations?


If you are just compounding daily, then maybe you don't need it.

However, it you want to compound continuously, I think you will need it. ( To use P*e^(r*t) )

And, good luck representing e with your BigDecimal class.

 
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bob smith
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      10-02-2012
On Tuesday, October 2, 2012 3:34:19 PM UTC-5, Peter Duniho wrote:
> On Tue, 2 Oct 2012 13:00:20 -0700 (PDT), bob smith wrote:
>
>
>
> > [...]

>
> > However, it you want to compound continuously, I think you will need it. ( To use P*e^(r*t) )

>
>
>
> Define "continuously". Do you mean as in computing an integral? What
>
> financial institution needs to do that? For what computation? Please
>
> provide an actual example.
>
>
>
> If you simply mean more than one period of compounding, then the finite
>
> nature of these computations means that it is sufficient to simply iterate
>
> as needed.
>
>
>
> > And, good luck representing e with your BigDecimal class.

>
>
>
> Fortunately, e is not a commonly used constant in financial computations.


I'm talking about this:

http://www.mathwords.com/c/continuou...d_interest.htm

I don't know if anyone uses it in real life except for math class.
 
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Gene Wirchenko
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      10-02-2012
On Tue, 2 Oct 2012 13:00:20 -0700 (PDT), bob smith
<(E-Mail Removed)> wrote:

[snip]

>And, good luck representing e with your BigDecimal class.


Good luck representing e with floating point.

I know that either way, one will have an approximation. Do you?

Sincerely,

Gene Wirchenko
 
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glen herrmannsfeldt
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      10-02-2012
Peter Duniho <(E-Mail Removed)> wrote:
> On Tue, 2 Oct 2012 13:00:20 -0700 (PDT), bob smith wrote:


>> [...]
>> However, it you want to compound continuously, I think you will need it. ( To use P*e^(r*t) )


> Define "continuously". Do you mean as in computing an integral? What
> financial institution needs to do that? For what computation? Please
> provide an actual example.


Story in my high-school calculus class 30 something years ago was
that there was a time when banks were competing on compounding.

I do remember some advertizing as compounding daily. In that
climate, one bank decided to offer compounding continuously.
(Maybe after another offered compounding minutely or secondly.)
The difference gets ever smaller very fast, though.

Maybe about the same time, there was competition between blender
companies on how many speeds they had. Six, eight, or more.
Then one company put a knob on for an infinite number of speeds,
but no-one would buy them.

Maybe the same thing happened to banks and interest.

-- glen
 
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Lew
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      10-02-2012
Peter Duniho wrote:
> bob smith wrote:
>> [...]
>> However, it you want to compound continuously, I think you will need it. ( To use P*e^(r*t) )

>
> Define "continuously". Do you mean as in computing an integral? What
> financial institution needs to do that? For what computation? Please
> provide an actual example.
>
> If you simply mean more than one period of compounding, then the finite
> nature of these computations means that it is sufficient to simply iterate
> as needed.
>
>> And, good luck representing e with your BigDecimal class.


static final BigDecimal EULERS = new BigDecimal(Math.E);

What's the big deal? Of course, it's no more accurate than the 'double' representation.

> Fortunately, e is not a commonly used constant in financial computations.


--
Lew
 
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David Lamb
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      10-03-2012
On 02/10/2012 2:59 PM, bob smith wrote:
> Don't you need to be able to raise to a floating point power for interest? (i.e. not an integer)


Only for things like present value, which is for financial planning
rather than managing one's money directly. There are Rules (with a
capital R) for how many digits to keep for simple interest calculations;
compounding happens naturally as they add the interest to the principal
(no exponentiation involved).

 
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