Calculate Simple Interest in Java

In this article, we will understand how to write a Java program to calculate simple interest. But, before doing it, let's understand how we calculate simple interest mathematically.

The simple interest is a way to determine the amount of interest gained on a principal amount at the specified interest rate for a given time. Unlike compound interest, its principal amount does not change over time.

To calculate Simple Interest, we use the following formula?

Simple Interest (S.I) = Principal * Time * Rate / 100
where,

P is the principal amount
T is the time
R is the rate

Below is an example of the same.

Input : P = 100000
        R = 5
        T = 2
Output: 1000

Algorithm

We are going to use the following steps to calculate Simple Interest in Java.

Step 1 - Start
Step 2 - Declare variables: principal, time, rate, and simple Interest.
Step 3 - Assign values to principal, time, and rate.
Step 4 - Use the formula: (principal * time * rate) / 100.
Step 5 - Store the result in simple Interest.
Step 6 - Display all input values and the calculated simple interest.
Step 7 - Stop

Java Program to Calculate Simple Interest

Following is a Java program to calculate the simple Interest -

public class SimpleInterest {
   public static void main(String[] args) {
      double principal = 10000; // Principal amount
      double time = 3; // Time in years
      double rate = 5.5; // Interest rate in %

      double simpleInterest = (principal * time * rate) / 100;

      System.out.println("Principal: " + principal);
      System.out.println("Time (years): " + time);
      System.out.println("Rate of Interest: " + rate);
      System.out.println("Simple Interest is: " + simpleInterest);
   }
}

On compiling, the above program gives you the following output.

Principal: 10000.0
Time (years): 3.0
Rate of Interest: 5.5
Simple Interest is: 1650.0

Example

Let's see one more example on this -

public class SimpleInterestFloat {
   public static void main(String[] args) {
      float principal = 12500.50f; // Principal amount in float
      float time = 1.5f; // Time in years
      float rate = 6.5f; // Interest rate in %

      float simpleInterest = (principal * time * rate) / 100;

      System.out.println("Principal: " + principal);
      System.out.println("Time (years): " + time);
      System.out.println("Rate of Interest: " + rate);
      System.out.println("Simple Interest is: " + simpleInterest);
   }
}

On compiling, the above program gives you the following output.

Principal: 12500.5
Time (years): 1.5
Rate of Interest: 6.5
Simple Interest is: 1218.7987