Calculate Simple Interest

Program to calculate simple interest

JavaScriptBeginner
JavaScript
// Formula: SI = (P × R × T) / 100
// Where: P = Principal, R = Rate, T = Time

let principal = 10000;
let rate = 5; // 5% per annum
let time = 2; // 2 years

let simpleInterest = (principal * rate * time) / 100;
let amount = principal + simpleInterest;

console.log("Principal: ₹" + principal);
console.log("Rate: " + rate + "% per annum");
console.log("Time: " + time + " years");
console.log("Simple Interest: ₹" + simpleInterest);
console.log("Total Amount: ₹" + amount);

// Function version
function calculateSimpleInterest(p, r, t) {
    let interest = (p * r * t) / 100;
    let total = p + interest;
    return {
        principal: p,
        rate: r,
        time: t,
        interest: interest,
        totalAmount: total
    };
}

let result = calculateSimpleInterest(5000, 8, 3);
console.log("\nUsing function:");
console.log(`Principal: ₹${result.principal}`);
console.log(`Interest: ₹${result.interest.toFixed(2)}`);
console.log(`Total: ₹${result.totalAmount.toFixed(2)}`);

Output

Principal: ₹10000
Rate: 5% per annum
Time: 2 years
Simple Interest: ₹1000
Total Amount: ₹11000

Using function:
Principal: ₹5000
Interest: ₹1200.00
Total: ₹6200.00

This program calculates simple interest using the standard formula.

Simple Interest Formula

SI = (P × R × T) / 100

Where:

  • P = Principal (initial amount)

  • R = Rate of interest (percentage per year)

  • T = Time period (in years)

Total Amount

Amount = Principal + Simple Interest

Example Calculation

For ₹10,000 at 5% for 2 years:

  • SI = (10000 × 5 × 2) / 100 = ₹1,000
  • Amount = 10,000 + 1,000 = ₹11,000

Key Concepts

  1. Principal: The initial amount invested/borrowed

  2. Rate: Interest rate as percentage (e.g., 5 means 5%)

  3. Time: Duration in years

  4. Interest: The extra amount earned/paid

  5. Amount: Principal + Interest

Function Approach

Creating a reusable function that returns an object:

javascript
function calculateSimpleInterest(p, r, t) {
    let interest = (p * r * t) / 100;
    return {
        principal: p,
        interest: interest,
        totalAmount: p + interest
    };
}

Benefits:

  • Reusable code
  • Returns structured data
  • Easy to test
  • Clear calculation logic

Real-world Applications

  • Bank savings accounts
  • Loan calculations
  • Investment planning
  • Financial planning tools

Note: Simple interest is different from compound interest, which calculates interest on interest!