Introduction
Java program To Calculate Compound Interest
This code takes the principal amount, annual interest rate (as a percentage), number of years, and compounding frequency (how many times per year the interest is compounded) as input from the user.
The integer is stored in a variable using System.in, and is displayed on the screen using System.out.
To understand this example, you should have the knowledge of the following Java programming topics:
To calculate the Compound Interest
A java program to calculate Compound Interest
Java Code
import java.util.Scanner;
public class CompoundInterestCalculator {
public static void main(String[] args) {
Scanner scanner = new Scanner(System.in);
// Input principal amount
System.out.print("Enter the principal amount: ");
double principal = scanner.nextDouble();
// Input annual interest rate (as a percentage)
System.out.print("Enter the annual interest rate (as a percentage): ");
double annualRate = scanner.nextDouble();
// Input number of years
System.out.print("Enter the number of years: ");
int years = scanner.nextInt();
// Input number of times interest is compounded per year
System.out.print("Enter the number of times interest is compounded per year: ");
int compoundingFrequency = scanner.nextInt();
// Convert annual rate to decimal and calculate compound interest
double rate = annualRate / 100;
double amount = principal * Math.pow(1 + (rate / compoundingFrequency), compoundingFrequency * years);
// Calculate compound interest
double compoundInterest = amount - principal;
// Display the result
System.out.println("The compound interest after " + years + " years is: " + compoundInterest);
// Close the scanner
scanner.close();
}
}Output 1
Enter the principal amount: 5000
Enter the annual interest rate (as a percentage): 5
Enter the number of years: 3
Enter the number of times interest is compounded per year: 4
The compound interest after 3 years is: 797.1955807499652Output 2
Enter the principal amount: 10000
Enter the annual interest rate (as a percentage): 3.5
Enter the number of years: 5
Enter the number of times interest is compounded per year: 12
The compound interest after 5 years is: 1938.8365362833173Try Yourself
- Annual Compounding: Set the compounding frequency to 1. How does it compare to Simple Interest?
- Double the Money: Experiment with inputs to find how long it takes to double your money at 10% interest.
- Math.pow: What does
Math.pow(2, 3)return? Write a small test program to check. - Rounding: The output has many decimal places. Can you format it to 2 decimal places using
System.out.printf? - Brain Twister: Calculate the difference between Simple Interest and Compound Interest for the same Principal, Rate, and Time.