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. Remember that in this program we are using pow() function of math.h library to quickly calculate power from given base and exponent.

You may have to use -lm parameter to compile the program. It helps the gcc compiler to include the math library.

gcc CompoundInterest.CPP -lm

Program

CompoundInterest.CPPCopy
#include <iostream>
#include <math.h>

using namespace std;
 
int main() {

    float principal, rate, time, result;

    cout << "Enter principal : ";
    cin >> principal;

    cout << endl << "Enter rate : ";
    cin >> rate;

    cout << endl << "Enter time (year) : ";
    cin >> time;

    // Calculate compound interest 
    result = principal * pow((1 + rate / 100), time);

    cout << endl << "Compound interest : " << result;

    return 0;
}
Try It

Output

Enter principal : 100
Enter rate : 25
Enter time (year) : 6
Compound interest : 381.47