Compound Interest

Compound interest (or compounding interest) is the interest calculated on the principal, including all cumulative interest on deposits or loans in the previous period. – Investopedia

Logic

To calculate compound interest we have to use a very simple formula shown below:

Compound interest formula

Where, P = Principle T = Time and R = Rate

To calculate compound interest we have to multiply principle amount with the power of (1 + Rate / 100) with time as an exponent. To calculate power we have used pow() method of the class Math.

Program

CompoundInterest.javaCopy
import java.util.Scanner;

public class CompoundInterest {

    public static void main(String[] args) {
        
        Scanner scanner = new Scanner(System.in);

        System.out.println("Enter principal : ");
        float principal = scanner.nextFloat();

        System.out.println("Enter rate : ");
        float rate = scanner.nextFloat();

        System.out.println("Enter time : ");
        float time = scanner.nextFloat();

        // Calculate compound interest 
        double result = principal * Math.pow((1 + rate / 100), time);
        
        System.out.println("Compound interest : " + result);

    }

}
Try It

Output

Enter principal : 100
Enter rate : 25
Enter time (year) : 6
Compound interest : 381.4697265625