Question

Write a Java program to calculate compound interest. ​

Answer 1

Answer:

public class JavaExample {

   public void calculate(int p, int t, double r, int n) {

       double amount = p * Math.pow(1 + (r / n), n * t);

       double cinterest = amount - p;

       System.out.println("Compound Interest after " + t + " years: "+cinterest);

       System.out.println("Amount after " + t + " years: "+amount);

   }

   public static void main(String args[]) {

    JavaExample obj = new JavaExample();

    obj.calculate(2000, 5, .08, 12);

   }

}

Explanation:

Compound Interest Formula

Compound interest is calculated using the following formula:

P (1 + R/n) (nt) - P

Here P is principal amount.

R is the annual interest rate.

t is the time the money is invested or borrowed for.

n is the number of times that interest is compounded per unit t, for example if interest is compounded monthly and t is in years then the value of n would be 12. If interest is compounded quarterly and t is in years then the value of n would be 4.

Let’s say an amount of $2,000 is deposited into a bank account as a fixed deposit at an annual interest rate of 8%, compounded monthly, the compound interest after 5 years would be:

P = 2000.

R = 8/100 = 0.08 (decimal).

n = 12.

t = 5.

Let’s put these values in the formula.

Compound Interest = 2000 (1 + 0.08 / 12) (12 * 5) – 2000 = $979.69

So, the compound interest after 5 years is $979.69.