In this post, we will learn how to calculate compound interest using C++ Programming language.
Compound Interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.
The formula to calculate compound interest is: Compound Interest = P x (1 + r/n)nt – P
Where,
- P is the principal amount.
- r is the rate of interest (decimal)
- n is the no. of times the interest is compounded annually
- t is the overall time duration
Since, we are taking n = 1 in the below program, therefore the formula becomes CI = P x (1 + r)t – P.
We will use this formula in the below program to calculate compound interest.
So, without further ado, let’s begin this tutorial.
C++ Program to Calculate Compound Interest
// C++ Program to Calculate Compound Interest
#include <iostream>
#include <math.h>
using namespace std;
int main(){
float p, r, t, CI, amount;
// Asking for input
cout << "Enter the principal amount: ";
cin >> p;
cout << "Enter the rate of interest: ";
cin >> r;
cout << "Enter the time period in years: ";
cin >> t;
// Calculating compound interest
amount = p * (pow((1 + r/100), t));
CI = amount - p;
// Displaying output
cout << "Compound interest is = " << CI << endl;
return 0;
}
Output
Enter the principal amount: 50000
Enter the rate of interest: 4
Enter the time period in years: 5
Compound interest is = 10832.6
How Does This Program Work?
float p, r, t, CI, amount;
In this program, we have declared five integer data type variables named p, r, t, CI and amount.
// Asking for input
cout << "Enter the principal amount: ";
cin >> p;
cout << "Enter the rate of interest: ";
cin >> r;
cout << "Enter the time period in years: ";
cin >> t;
Then, the user is asked to enter the principal amount, rate of interest and time period (in years). The entered values get stored in the p, r, and t named variables respectively.
// Calculating compound interest
amount = p * (pow((1 + r/100), t));
CI = amount - p;
Compound Interest is calculated using the formula: CI = P x (1 + r)t – P.
The pow() function is used to find the value of a base raised to the power of another number. It is defined in the math.h header file.
// Displaying output
cout << "Compound interest is = " << CI << endl;
Finally, the compound interest computed above is displayed on the screen using the cout statement.
Conclusion
I hope after going through this post, you understand how to calculate compound interest using the C++ Programming language.
If you have any doubts regarding the program, then contact us in the comment section. We will be delighted to assist you.
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