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Calculate compound interest in JavaScript
Compound Interest Formula
Compound interest is calculated using the following formula −
CI = P*(1 + R/n) (nt) – P
Here,
- 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.
Example
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));Output
The output in the console: −
979.6914166032097
Updated on: 15-Sep-2020
4K+ Views
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