How to Calculate Simple and Compound Interest

Mathematics is an integral part of programming. If you can't solve simple problems in this area, you'll struggle a lot more than needs to be the case.

Fortunately, learning how to do so isn't too difficult. In this article, you'll learn how to calculate simple interest and compound interest using Python, C++, and JavaScript.

How Do You Calculate Simple Interest?

Simple interest is a method to calculate the amount of interest charged on a principle amount at a given rate and for a given period of time. You can calculate the simple interest by using the following formula:

Simple Interest = (P x R x T)/100 
Where, 
P = Principle Amount
R = Rate
T = Time

The Problem Statement

You're given principle amount, rate of interest, and time. You need to calculate and print the simple interest for the given values. Example: Let principle = 1000, rate = 7, and timePeriod = 2. Simple Interest = (principle * rate * timePeriod) / 100 = (1000 * 7 * 2) / 100 = 140. Thus, the output is 140.

The C++ Program to Calculate Simple Interest

Below is the C++ program to calculate simple interest:

// C++ program to calculate simple interest
// for given principle amount, time, and rate of interest.
#include <bits/stdc++.h>
using namespace std;
// Function to calculate simple interest
float calculateSimpleInterest(float principle, float rate, float timePeriod)
{
 return (principle * rate * timePeriod) / 100;
}

int main()
{
 float principle1 = 1000;
 float rate1 = 7;
 float timePeriod1 = 2;
 cout << "Test case: 1" << endl;
 cout << "Principle amount: " << principle1 << endl;
 cout << "Rate of interest: " << rate1 << endl;
 cout << "Time period: " << timePeriod1 << endl;
 cout << "Simple Interest: " << calculateSimpleInterest(principle1, rate1, timePeriod1) << endl;
 float principle2 = 5000;
 float rate2 = 5;
 float timePeriod2 = 1;
 cout << "Test case: 2" << endl;
 cout << "Principle amount: " << principle2 << endl;
 cout << "Rate of interest: " << rate2 << endl;
 cout << "Time period: " << timePeriod2 << endl;
 cout << "Simple Interest: " << calculateSimpleInterest(principle2, rate2, timePeriod2) << endl;
 float principle3 = 5800;
 float rate3 = 4;
 float timePeriod3 = 6;
 cout << "Test case: 3" << endl;
 cout << "Principle amount: " << principle3 << endl;
 cout << "Rate of interest: " << rate3 << endl;
 cout << "Time period: " << timePeriod3 << endl;
 cout << "Simple Interest: " << calculateSimpleInterest(principle3, rate3, timePeriod3) << endl;
return 0;
}

Output:

Test case: 1
Principle amount: 1000
Rate of interest: 7
Time period: 2
Simple Interest: 140
Test case: 2
Principle amount: 5000
Rate of interest: 5
Time period: 1
Simple Interest: 250
Test case: 3
Principle amount: 5800
Rate of interest: 4
Time period: 6
Simple Interest: 1392

Related: How to Find All Factors of a Natural Number in C++, Python, and JavaScript

The Python Program to Calculate Simple Interest

Below is the Python program to calculate simple interest:

# Python program to calculate simple interest
# for given principle amount, time, and rate of interest.
# Function to calculate simple interest
def calculateSimpleInterest(principle, rate, timePeriod):
    return (principle * rate * timePeriod) / 100

principle1 = 1000
rate1 = 7
timePeriod1 = 2
print("Test case: 1")
print("Principle amount:", principle1)
print("Rate of interest:", rate1)
print("Time period:", timePeriod1)
print("Simple Interest:", calculateSimpleInterest(principle1, rate1, timePeriod1))
principle2 = 5000
rate2 = 5
timePeriod2 = 1
print("Test case: 2")
print("Principle amount:", principle2)
print("Rate of interest:", rate2)
print("Time period:", timePeriod2)
print("Simple Interest:", calculateSimpleInterest(principle2, rate2, timePeriod2))
principle3 = 5800
rate3 = 4
timePeriod3 = 6
print("Test case: 3")
print("Principle amount:", principle3)
print("Rate of interest:", rate3)
print("Time period:", timePeriod3)
print("Simple Interest:", calculateSimpleInterest(principle3, rate3, timePeriod3))

Output:

Test case: 1
Principle amount: 1000
Rate of interest: 7
Time period: 2
Simple Interest: 140.0
Test case: 2
Principle amount: 5000
Rate of interest: 5
Time period: 1
Simple Interest: 250.0
Test case: 3
Principle amount: 5800
Rate of interest: 4
Time period: 6
Simple Interest: 1392.0

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The JavaScript Program to Calculate Simple Interest

Below is the JavaScript program to calculate simple interest:

// JavaScript program to calculate simple interest
// for given principle amount, time, and rate of interest.
// Function to calculate simple interest
function calculateSimpleInterest(principle, rate, timePeriod) {
 return (principle * rate * timePeriod) / 100;
}
var principle1 = 1000;
var rate1 = 7;
var timePeriod1 = 2;
document.write("Test case: 1" + "<br>");
document.write("Principle amount: " + principle1 + "<br>");
document.write("Rate of interest: " + rate1 + "<br>");
document.write("Time period: " + timePeriod1 + "<br>");
document.write("Simple Interest: " + calculateSimpleInterest(principle1, rate1, timePeriod1) + "<br>");
var principle2 = 5000;
var rate2 = 5;
var timePeriod2 = 1;
document.write("Test case: 2" + "<br>");
document.write("Principle amount: " + principle2 + "<br>");
document.write("Rate of interest: " + rate2 + "<br>");
document.write("Time period: " + timePeriod2 + "<br>");
document.write("Simple Interest: " + calculateSimpleInterest(principle2, rate2, timePeriod2) + "<br>");
var principle3 = 5800;
var rate3 = 4;
var timePeriod3 = 6;
document.write("Test case: 3" + "<br>");
document.write("Principle amount: " + principle3 + "<br>");
document.write("Rate of interest: " + rate3 + "<br>");
document.write("Time period: " + timePeriod3 + "<br>");
document.write("Simple Interest: " + calculateSimpleInterest(principle3, rate3, timePeriod3) + "<br>");

Output:

Test case: 1
Principle amount: 1000
Rate of interest: 7
Time period: 2
Simple Interest: 140
Test case: 2
Principle amount: 5000
Rate of interest: 5
Time period: 1
Simple Interest: 250
Test case: 3
Principle amount: 5800
Rate of interest: 4
Time period: 6
Simple Interest: 1392

How to Calculate Compound Interest

Compound interest is the addition of interest to the principal amount. In other words, it's interest on interest. You can calculate the compound interest by using the following formula:

 Amount= P(1 + R/100)T
  Compound Interest = Amount – P
 Where,
 P = Principle Amount
 R = Rate
 T = Time

The Problem Statement

You're given principle amount, rate of interest, and time. You need to calculate and print the compound interest for the given values. Example: Let principle = 1000, rate = 7, and timePeriod = 2. Amount= P(1 + R/100)T = 1144.9 Compound Interest = Amount - Principle Amount = 1144.9 - 1000 = 144.9 Thus, the output is 144.9.

The C++ Program to Calculate Compound Interest

Below is the C++ program to calculate compound interest:

// C++ program to calculate compound interest
// for given principle amount, time, and rate of interest.
#include <bits/stdc++.h>
using namespace std;
// Function to calculate compound interest
float calculateCompoundInterest(float principle, float rate, float timePeriod)
{
 double amount = principle * (pow((1 + rate / 100), timePeriod));
 return amount - principle;
}
int main()
{
 float principle1 = 1000;
 float rate1 = 7;
 float timePeriod1 = 2;
 cout << "Test case: 1" << endl;
 cout << "Principle amount: " << principle1 << endl;
 cout << "Rate of interest: " << rate1 << endl;
 cout << "Time period: " << timePeriod1 << endl;
 cout << "Compound Interest: " << calculateCompoundInterest(principle1, rate1, timePeriod1) << endl;
 float principle2 = 5000;
 float rate2 = 5;
 float timePeriod2 = 1;
 cout << "Test case: 2" << endl;
 cout << "Principle amount: " << principle2 << endl;
 cout << "Rate of interest: " << rate2 << endl;
 cout << "Time period: " << timePeriod2 << endl;
 cout << "Compound Interest: " << calculateCompoundInterest(principle2, rate2, timePeriod2) << endl;
 float principle3 = 5800;
 float rate3 = 4;
 float timePeriod3 = 6;
 cout << "Test case: 3" << endl;
 cout << "Principle amount: " << principle3 << endl;
 cout << "Rate of interest: " << rate3 << endl;
 cout << "Time period: " << timePeriod3 << endl;
 cout << "Compound Interest: " << calculateCompoundInterest(principle3, rate3, timePeriod3) << endl;
return 0;
}

Output:

Test case: 1
Principle amount: 1000
Rate of interest: 7
Time period: 2
Compound Interest: 144.9
Test case: 2
Principle amount: 5000
Rate of interest: 5
Time period: 1
Compound Interest: 250
Test case: 3
Principle amount: 5800
Rate of interest: 4
Time period: 6
Compound Interest: 1538.85

Related: How to Reverse an Array in C++, Python, and JavaScript

The Python Program to Calculate Compound Interest

Below is the Python program to calculate compound interest:

# Python program to calculate compound interest
# for given principle amount, time, and rate of interest.
# Function to calculate compound interest
def calculateCompoundInterest(principle, rate, timePeriod):
    amount = principle * (pow((1 + rate / 100), timePeriod))
    return amount - principle
principle1 = 1000
rate1 = 7
timePeriod1 = 2
print("Test case: 1")
print("Principle amount:", principle1)
print("Rate of interest:", rate1)
print("Time period:", timePeriod1)
print("Compound Interest:", calculateCompoundInterest(principle1, rate1, timePeriod1))
principle2 = 5000
rate2 = 5
timePeriod2 = 1
print("Test case: 2")
print("Principle amount:", principle2)
print("Rate of interest:", rate2)
print("Time period:", timePeriod2)
print("Compound Interest:", calculateCompoundInterest(principle2, rate2, timePeriod2))
principle3 = 5800
rate3 = 4
timePeriod3 = 6
print("Test case: 3")
print("Principle amount:", principle3)
print("Rate of interest:", rate3)
print("Time period:", timePeriod3)
print("Compound Interest:", calculateCompoundInterest(principle3, rate3, timePeriod3))

Output:

Test case: 1
Principle amount: 1000
Rate of interest: 7
Time period: 2
Compound Interest: 144.9000000000001
Test case: 2
Principle amount: 5000
Rate of interest: 5
Time period: 1
Compound Interest: 250.0
Test case: 3
Principle amount: 5800
Rate of interest: 4
Time period: 6
Compound Interest: 1538.8503072768026

Related: How to Find the Sum of All Elements in an Array

The JavaScript Program to Calculate Compound Interest

Below is the JavaScript program to calculate compound interest:

// JavaScript program to calculate compound interest
// for given principle amount, time, and rate of interest.

// Function to calculate compound interest
function calculateCompoundInterest(principle, rate, timePeriod) {
 var amount = principle * (Math.pow((1 + rate / 100), timePeriod));
 return amount - principle;
}
var principle1 = 1000;
var rate1 = 7;
var timePeriod1 = 2;
document.write("Test case: 1" + "<br>");
document.write("Principle amount: " + principle1 + "<br>");
document.write("Rate of interest: " + rate1 + "<br>");
document.write("Time period: " + timePeriod1 + "<br>");
document.write("Compound Interest: " + calculateCompoundInterest(principle1, rate1, timePeriod1) + "<br>");
var principle2 = 5000;
var rate2 = 5;
var timePeriod2 = 1;
document.write("Test case: 2" + "<br>");
document.write("Principle amount: " + principle2 + "<br>");
document.write("Rate of interest: " + rate2 + "<br>");
document.write("Time period: " + timePeriod2 + "<br>");
document.write("Compound Interest: " + calculateCompoundInterest(principle2, rate2, timePeriod2) + "<br>");
var principle3 = 5800;
var rate3 = 4;
var timePeriod3 = 6;
document.write("Test case: 3" + "<br>");
document.write("Principle amount: " + principle3 + "<br>");
document.write("Rate of interest: " + rate3 + "<br>");
document.write("Time period: " + timePeriod3 + "<br>");
document.write("Compound Interest: " + calculateCompoundInterest(principle3, rate3, timePeriod3) + "<br>");

Output:

Test case: 1
Principle amount: 1000
Rate of interest: 7
Time period: 2
Compound Interest: 144.9000000000001
Test case: 2
Principle amount: 5000
Rate of interest: 5
Time period: 1
Compound Interest: 250
Test case: 3
Principle amount: 5800
Rate of interest: 4
Time period: 6
Compound Interest: 1538.8503072768008

Learn to Code for Free: Start With Simple and Compound Interest

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