Hi Alisha93,
Reading the old question from Bulleride again (now, after almost 9 months), I would hesitate to call this DO loop a DOW loop, because the typical UNTIL condition is missing here. (Of course, one could add such a condition pro forma: until(year>3) should fit.)
Apparently, the purpose of the code shown is just to test the reader's understanding of how the SAS data step works. It is not suitable for demonstrating the benefits of a DOW loop.
You can see more easily how the code works if you insert diagnostic PUT statements:
data newbank;
put 'Before loop: ' _all_;
do year = 1 to 3;
put 'In loop, before SET: ' _all_;
set banks;
put 'In loop, after SET: ' _all_;
capital + 5000;
end;
put 'After loop: ' _all_;
run;
The above data step will write the following lines to the log:
Before loop: year=. name= rate=. capital=0 _ERROR_=0 _N_=1
In loop, before SET: year=1 name= rate=. capital=0 _ERROR_=0 _N_=1
In loop, after SET: year=1 name=FirstCapital rate=0.0718 capital=0 _ERROR_=0 _N_=1
In loop, before SET: year=2 name=FirstCapital rate=0.0718 capital=5000 _ERROR_=0 _N_=1
In loop, after SET: year=2 name=DirectBank rate=0.0721 capital=5000 _ERROR_=0 _N_=1
In loop, before SET: year=3 name=DirectBank rate=0.0721 capital=10000 _ERROR_=0 _N_=1
In loop, after SET: year=3 name=VirtualDirect rate=0.0728 capital=10000 _ERROR_=0 _N_=1
After loop: year=4 name=VirtualDirect rate=0.0728 capital=15000 _ERROR_=0 _N_=1
Before loop: year=. name=VirtualDirect rate=0.0728 capital=15000 _ERROR_=0 _N_=2
In loop, before SET: year=1 name=VirtualDirect rate=0.0728 capital=15000 _ERROR_=0 _N_=2
Within the first iteration of the data step (see the lines with _N_=1 written by the PUT statements) the SET statement is executed three times as part of the body of the DO loop. It writes the first, second and third observation, resp., of dataset BANKS to the program data vector (PDV), each time overwriting the previous contents of the PDV. Thus, after the loop (YEAR=4), NAME and RATE only from the last observation are present in the PDV and when the RUN statement is reached, these values, together with YEAR=4 and CAPITAL=15000, are automatically written to dataset NEWBANK. (Variable CAPITAL had been initialized to 0 and incremented by 5000 in each iteration of the DO loop by means of the Sum statement.)
At the beginning of the second iteration of the data step (_N_=2) variable YEAR is reinitialized to missing, whereas the values of NAME, RATE and CAPITAL are retained. (For NAME and RATE this is because of the SET statement, for CAPITAL it's a feature of the Sum statement.)
Now the DO loop starts again with year=1 (as is shown by the last line written by the PUT statements). But as soon as the SET statement attempts to read the non-existing fourth observation of dataset BANKS, the data step terminates. So, NEWBANK contains one observation with four variables (year=4 name=VirtualDirect rate=0.0728 capital=15000), resulting from the first iteration of the data step (which in turn included three iterations of the DO loop).
