Algorithm for a Basic Finance Application: Monthly Budget Calculation

In this assignment, I am tasked with developing an algorithm for a finance application that helps users
calculate their monthly budget. The algorithm will prompt the user to input their monthly income, fixed
expenses (such as rent and utilities), and variable expenses (such as groceries and entertainment). It will
then calculate the remaining budget after deducting these expenses. The algorithm will incorporate
essential programming concepts like sequencing, conditional selection, iterative processes, and
debugging techniques to ensure accurate and efficient results.

Step-by-Step Sequencing Algorithm for Monthly Budget Calculation

1. Start: The algorithm begins by initializing the required variables.

o Initialize income to store the user's monthly income.

o Initialize fixed_expenses for storing fixed expenses such as rent and utilities.

o Initialize variable_expenses as a list to store multiple variable expense entries.

2. Input Management:

o Prompt the user to input their total monthly income, which is stored in the income
variable.

o Prompt the user to input their total fixed expenses, which include rent, utilities,
insurance, etc., and store this value in the fixed_expenses variable.

o Iterative Process for Variable Expenses:

 Ask the user how many variable expenses they want to input.

 Use a loop (e.g., for or while) to allow the user to enter multiple variable
expenses (such as groceries, transportation, entertainment). Each entry is added
to the variable_expenses list.

3. Summing Variable Expenses:

o Once all variable expenses are entered, use an iterative loop to sum all the values in the
variable_expenses list. Store the result in a total_variable_expenses variable.

4. Total Expenses Calculation:

o Calculate the total expenses by summing fixed_expenses and total_variable_expenses.

5. Conditional Logic for Budget Calculation:

o Use conditional statements to handle different outcomes based on the user’s income
and expenses:

 If the total expenses exceed the user’s income, notify the user that they are
over budget.
  If the total expenses are within the income limit, calculate the remaining budget
and display it to the user.

6. Display Output:

o Based on the condition, display the remaining budget or a message indicating that the
user is over budget. The remaining budget is calculated as income - total_expenses.

7. End: The algorithm finishes execution after displaying the appropriate message.

Pseudocode for the Monthly Budget Algorithm

START

Prompt user for monthly income and store in variable `income`

Prompt user for fixed expenses and store in variable `fixed_expenses`

Initialize an empty list `variable_expenses`

Prompt user for number of variable expenses

FOR each expense in the range of variable expenses:

Prompt user to input expense amount

Append the value to the `variable_expenses` list

Initialize `total_variable_expenses` to 0

FOR each expense in `variable_expenses`:

Add expense to `total_variable_expenses`

Calculate `total_expenses = fixed_expenses + total_variable_expenses`

IF `total_expenses > income`:

Display "You are over budget"

ELSE:

Calculate `remaining_budget = income - total_expenses`

Display remaining budget

During development, logical errors may arise where the algorithm occasionally miscalculates the
remaining budget. These errors could be due to incorrect handling of the input values or improper
summation of expenses. I would use the following debugging techniques and tools to identify and
correct the errors:

1. Manual Testing:

o I would manually input a variety of test cases with different income and expense values.
By observing the output for each test, I can compare the results to the expected values
and identify inconsistencies.

o For example, if the remaining budget calculation is incorrect when certain expense
combinations are inputted, I would examine how the algorithm processes fixed and
variable expenses.

2. Print Statements:

o A simple yet effective debugging technique is to add print statements at key points in
the algorithm to track variable values. For instance, I would print the values of income,
fixed_expenses, total_variable_expenses, and total_expenses before and after each
calculation. This will allow me to confirm that the algorithm is summing expenses
correctly.

o Additionally, printing intermediate steps, such as the sum of variable expenses within
the loop, helps trace where the logic might break.

3. Using a Debugger Tool:

o Using a built-in debugger tool (e.g., in IDEs like PyCharm or Visual Studio Code) will
allow me to step through the algorithm one line at a time. With this tool, I can monitor
the state of each variable during execution, set breakpoints to halt the program at
specific points, and inspect whether values are being updated as expected. This is
especially helpful in isolating the line or loop where the error occurs.

4. Logic Review:

o Another debugging method is to review the logic flow and ensure all branches of
conditional statements cover all potential scenarios. For example, if I have conditional
checks like if total_expenses > income, I need to ensure the algorithm correctly handles
edge cases, such as when income equals expenses or when expenses are zero.

o I would also ensure that the iterative loop for variable expenses correctly adds each
entry, avoiding any overlooked values that might skew the total.

5. Boundary Testing:
 o I would test the algorithm with extreme values (e.g., zero income, very high expenses,
no variable expenses) to ensure that the logic holds across various edge cases. This
helps identify if the algorithm behaves unexpectedly under specific conditions.

6. Code Refactoring:

o After identifying the logical error, I may need to refactor the code to simplify the
operations or make the calculations more robust. For example, I might split complex
calculations into smaller, more manageable functions to reduce the risk of errors and
make the code easier to debug.

Conclusion

By following this step-by-step approach to building the algorithm and applying debugging techniques
such as print statements, using a debugger tool, and manual testing, I can ensure that the finance
application works correctly. This algorithm demonstrates how sequencing, conditional logic, and
iterative processes can effectively calculate a user’s monthly budget. Employing these methods ensures
an efficient, user-friendly tool while debugging ensures the elimination of logical errors, resulting in an
accurate and functional application.

References

Chaudhuri, A. B. (2020). Flowchart and algorithm basics: The art of programming. Mercury Learning &
Information.

MV, T. (2019, November 12). What exactly is a programming paradigm? freeCodeCamp.org.