Question

I just cannot find the correct answer, so here is my problem: I want to be able to calculate the indexation (a positive or negative percentage) over a price and period.

Expectations:

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Case #1
Price : 1.000,00
Indexation percentage : 5%

Calculation over 5 years with positive percentage:

1. 1000 x 5^0 = 1000
2. 1000 x 5^1 = 1050
3. 1000 x 5^2 = 1102,50
4. 1000 x 5^3 = 1157.625
5. 1000 x 5^4 = 1215,50625

Case #2
Price : 1.000,00
Indexation percentage : -5%

Calculation over 5 years with negative percentage:

1. 1000 x -5^0 = 1000
2. 1000 x -5^1 = 950
3. 1000 x -5^2 = 902,50
4. 1000 x -5^3 = 857,375
5. 1000 x -5^4 = 814,50625

Results:

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And this negative percentage goes wrong, because my java code prints this out:

1000
-5000
-125000
15625000
1175690408

My code is pretty simple, i think:

BigDecimal percentageValue = new BigDecimal("-5");
BigDecimal indexation = percentageValue.divide(ONE_HUNDRED).add(BigDecimal.ONE);
BigDecimal price = new BigDecimal("1000");

for (int i = 0; i < 5; i++)
{
  price = price.multiply(indexation.pow(i));
  System.out.println(price.intValue());
}

Solution:

static final BigDecimal ONE_HUNDRED = new BigDecimal("100");
public static void main(String[] args)
{
 BigDecimal percentageValue = new BigDecimal("-5");
 BigDecimal indexation = percentageValue.divide(ONE_HUNDRED).add(BigDecimal.ONE);
 BigDecimal price = new BigDecimal("1000");

 for (int i = 0; i < 5; i++)
 {
   BigDecimal result = price.multiply(indexation.pow(i));
   System.out.println(result);
 }
}

Answer 1

You should multiply by 1 + percents/100, 1% is 1/100.

Note that 5% intrest over one years makes 1000 become 1050 and not 5000

so for 5%: 1.05^n and for negative [-5%]: 0.95^n

You can use BigDecimal to do it, since the numebrs are not integers.

EDIT: [as respond to editted question] Your editted code does not produce the output you gave [assuming ONE_HUNDRED is initialized properly], however it still has a new issue:

  price = price.multiply(indexation.pow(i));
  System.out.println(price.intValue());

look at the second iteration, you already set price = price * indexation^1

When you multiply it again with indexation^i [i==2] you get a wrong result!

A solution could be one of those:

1. no need to pow() here, just multiply each iteration with the indexation.
2. Do not override price, hold the result of price.multiply(indexation.pow(i) in a new temp variable – and print it.