simulate_investment_return.py

# Function to simulate the scenario with investment coming from the original principal and annual interest on the investment
def simulate_investment(principal, withdraw_amount, invest_amount, no_of_years, annual_interest_rate=0.12, annual_withdrawal_increase=0.10):
    # Initialize variables
    total_investment = 0  # Amount in investments (compounded annually)
    current_principal = principal  # Starting amount
    current_withdraw_amount = withdraw_amount  # Monthly withdrawal amount
    months_in_year = 12  # Number of months in a year
    months = no_of_years * 12  # Total number of months

    # Iterate through each month
    for month in range(1, months + 1):
        # Withdraw from principal first, if there is any left
        if current_principal > 0:
            if current_principal >= current_withdraw_amount:
                current_principal -= current_withdraw_amount  # Withdraw from principal
            else:
                # Withdraw remaining principal and continue from investment
                current_withdraw_amount -= current_principal
                current_principal = 0

        # Once the principal is exhausted, withdraw from investments
        if current_principal <= 0:
            if total_investment >= current_withdraw_amount:
                total_investment -= current_withdraw_amount  # Withdraw from investment
            else:
                # If investment is insufficient, withdraw whatever is available
                current_withdraw_amount -= total_investment
                total_investment = 0

        # Invest the invest_amount from principal
        if current_principal > 0:
            current_principal -= invest_amount  # Deduct the investment amount from principal
            total_investment += invest_amount  # Add the new investment

        # Print the status of principal and investment every month
        print(f"Month {month}: Principal = ${current_principal:,.2f}, Total Investment = ${total_investment:,.2f}")

        # At the end of each year (every 12 months), apply annual increase and increase withdrawal amount by 5%
        if month % months_in_year == 0:
            # Apply annual 12% increase to the investment at the end of each year
            total_investment *= (1 + annual_interest_rate)  # Investment grows by 12% annually
            # Increase withdrawal amount after one year
            current_withdraw_amount *= (1 + annual_withdrawal_increase)

    # Return the final total amount (remaining principal + total investment)
    return current_principal + total_investment

# Example usage
if __name__ == "__main__":
    # Inputs
    principal = 2000000  # Example: Starting principal amount
    withdraw_amount = 10000  # Example: Initial monthly withdrawal amount
    invest_amount = 40000  # Example: Monthly investment amount (taken from the principal)
    no_of_years = 50  # Example: Duration in years

    # Simulate the scenario
    final_amount = simulate_investment(
        principal, withdraw_amount, invest_amount, no_of_years
    )

    # Output the final amount (remaining principal + total investment)
    print(f"\nFinal amount (remaining principal + total investment): ${final_amount:,.2f}")