Java Program to Calculate Compound Interest

Last Updated: 20 April, 2023

On this tutorial page we are going to learn what is compound interest and how to write a Java program to calculate compound interest.

Compound interest is the interest that is earned not only on the principal amount, but also on the accumulated interest from previous periods. To calculate compound interest, you need to know the principal amount, the interest rate, the number of compounding periods per year, and the length of time for which the interest is being calculated.

The formula for calculating compound interest is:

A = P(1 + r/n)^(nt)

Where:

A = the final amount, including principal and interest.

P = the principal amount.

r = the annual interest rate (as a decimal).

n = the number of times the interest is compounded per year.

t = the time period (in years).

Example: Calculate Compound Interest in Java

  
  import java.util.Scanner;
  public class InterestCalculator1 {
    public static void main(String[] args) {
      
      Scanner sc = new Scanner(System.in);
      double principalAmt, rate, time, number;
      
      System.out.print("Enter the Principal Amount: ");
      principalAmt = sc.nextFloat();
      System.out.print("Enter the Rate of interest: ");
      rate = sc.nextFloat();
      System.out.print("Enter the Time period (in Years): ");
      time = sc.nextFloat();
      System.out.print("Enter number of times interest is compounded: ");
      number = sc.nextFloat();
      sc.close();
      
      // Calculate the compound interest
      double interest = principalAmt * (Math.pow((1 + rate / 100), (time * number))) - principalAmt;
      
      System.out.println("Compound Interest: " + interest);
    }
  }

Output

Enter the Principal Amount: 500000
Enter the Rate of interest: 7.2
Enter the Time period (in Years): 5
Enter number of times interest is compounded: 1
Compound Interest: 207854.38580159063