In this tutorial, we will write a **java program to calculate compound interest**.

## 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.

**Before writing the java program let’s take an example to calculate the compound interest.**

**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.

## Java Program to calculate Compound Interest

In this java program we are calculating the compound interest, we are taking the **same example** that we have seen above for the calculation.

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); } }

**Output:**

Compound Interest after 5 years: 979.6914166032102 Amount after 5 years: 2979.69141660321

Screenshot from Eclipse IDE: