In this post, we will write a program for how to calculate compound interest in python.

First, let’s see **What is compound Interest?**

Compound Interest is also called compounding interest which is calculated on the principal (initial principal) that is the addition of interest to the principal sum of a loan or deposit.

The formula for compound interest is:

A = P (1 + r / 100) ^ n COMPOUND INTEREST = Amount - Principal Where, A = final amount including principal P = Principal r = Interest rate n = Time(in years)

**Examples:**

Input:

Principle (initial amount) = 20000

Rate = 3

Time = 3Output:

The Compound interest is 1854.54.Input:

Principle (initial amount) = 10000

Rate = 3

Time = 1Output:

The compound interest is 250.00.

Let’s see the program for this:

**Code:** Create a user-defined function which will calculate and print the compound interest value.

# define a function for calculating # compound interest def compoundinterest(p, r, t): # printing given principle amount print('Principal is:', p) # printing given rate print('Rate is:', r) # printing given time print('Time is:', t) # calculating compound interest A = p * ((1 + r / 100) ** t) CI = A - p # printing compound interest print('The Compound Interest is', CI) # main code if __name__ == "__main__" : # inputs p = 10000 r = 2 t = 4 compoundinterest(p, r, t)

**Output:**

Principal is: 10000 Rate is: 2 Time is: 4 The Compound Interest is 824.3215999999993