Calculate compound interest in JavaScript

Compound Interest Formula

Compound interest is calculated using the following formula −

CI = P*(1 + R/n) (nt) – P


  • P is the 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.

We are required to write a JavaScript function that takes in principal, rate, time, and the number n and calculates the compound interest.


Let’s write the code for this function −

const principal = 2000;
const time = 5;
const rate = .08;
const n = 12;
const compoundInterest = (p, t, r, n) => {
   const amount = p * (Math.pow((1 + (r / n)), (n * t)));
   const interest = amount - p;
   return interest;
console.log(compoundInterest(principal, time, rate, n));


The output in the console: −


Updated on: 15-Sep-2020

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