Python Program for compound interest

Let us discuss the formula for compound interest. The formula to calculate compound interest annually is given by: 

A = P(1 + R/100) ^t

Compound Interest = A – P 

Where, 
A is amount 
P is the principal amount 
R is the rate and 
T is the time span

Example: 

Input: Principal (amount): 1200, Time: 2, Rate: 5.4
Output: Compound Interest = 133.099243

Example

Python3

# Python3 program to find compound
# interest for given values.


def compound_interest(principal, rate, time):

    # Calculates compound interest
    Amount = principal * (pow((1 + rate / 100), time))
    CI = Amount - principal
    print("Compound interest is", CI)


# Driver Code
compound_interest(10000, 10.25, 5)

Output

Compound interest is 6288.946267774416

Time Complexity: O(1) since no loop is used the algorithm takes up constant time to perform the operations
Auxiliary Space: O(1) since no extra array is used so the space taken by the algorithm is constant.

Method#2: Input taking from user.

In this method we are going to calculate the compound interest by taking input from the user by using above formula.

Python3

# Python3 program to find compound
# interest for input taking from user.


def compound_interest(principal, rate, time):

    # Calculates compound interest
    Amount = principal * (pow((1 + rate / 100), time))
    CI = Amount - principal
    print("Compound interest is", CI)


# Driver Code
#Taking input from user.
principal = int(input("Enter the principal amount: "))
rate = int(input("Enter rate of interest: "))
time = int(input("Enter time in years: " ))
#Function Call
compound_interest(principal,rate,time)

#This code is contributed by Vinay Pinjala.

Input:

Enter the principal amount: 3000

Enter rate of interest: 5

Enter time in years: 3

Output:

Compound interest is 472.875

Time Complexity: O(1) since no loop is used the algorithm takes up constant time to perform the operations
Auxiliary Space: O(1) since no extra array is used so the space taken by the algorithm is constant.

Method #3:  Finding compound interest of given values without using pow() function.

Python3

# Python code
# To find compound interest

# inputs
p= 1200   # principal amount
t= 2      # time
r= 5.4    # rate
# calculates the compound interest
a=p*(1+(r/100))**t  # formula for calculating amount
ci=a-p  # compound interest = amount - principal amount
# printing compound interest value
print(ci)

Output

133.0992000000001

Time Complexity: O(1) since no loop is used the algorithm takes up constant time to perform the operations
Auxiliary Space: O(1) since no extra array is used so the space taken by the algorithm is constant

Please refer complete article on Program to find compound interest for more details!

Method #4:  using for loop:

Python3

def compound_interest(principal, rate, time):
    Amount = principal
    for i in range(time):
        Amount = Amount * (1 + rate/100)
    CI = Amount - principal
    print("Compound interest is", CI)
# Driver Code
compound_interest(1200, 5.4, 2)
#This code is contributed by Jyothi pinjala

Output

Compound interest is 133.0992000000001

Time complexity: O(1)
Auxiliary Space: O(1)