C Program to calculate Simple Interest

In this article, we have explained the concept of Simple Interest with the twists in it and implemented a program in C Programming Language to calculate Simple Interest.

Introduction to Simple Interest

Simple Interest is a concept that calculates the interest provided on the sum of money. This is a basic finance concept and comes in case of Fixed Deposits in bank.

The steps are as follows:

• A person deposits amount X in a bank account as fixed deposit
• The rate of interest offered by the bank is Y (% per year) at that time. It is important to note that this rate of interest will remain fixed for this person and any duration.
• The person keeps the money in the fixed deposit for M years.
• The interest earned every year is same and is accumulated over the M years.

Interest on first year I = Y * X

Total interest in M years = M * I = M * Y * X

The catch is there is a cap of the maximum duration. It is usually 10 years. Additionally, the interest is given out every 3 months. It is the 1/4 th of the total annual interest.

C Program to calculate Simple Interest

We have one main function: calSimpleInterest(). It simply calculates the total interest.

Note that the principle and time variable are integers while rate is in float.

Following is the C Program to calculate Simple Interest:

#include <stdio.h>

float calSimpleInterest(int principle, float rate, int time) {
    float simple_interest;
    simple_interest = (principle * rate * time) / 100;
    return simple_interest;
}

int main() {
    int principle, time;
    float rate;
    float simple_interest;

    printf("Enter principle amount in USD: ");
    scanf("%d", &principle);

    printf("\nEnter rate of interest: ");
    scanf("%f", &rate);

    printf("\nEnter time in years: ");
    scanf("%d", &time);

    // Calculate simple interest
    simple_interest = calSimpleInterest(principle, rate, time);
    
    printf("\nThe interest amount is: %f USD\n", simple_interest);
    
    return 0;
}

Compile and run the above code as follows:

gcc opengenus.c
./a.out

Input + Output:

Enter principle amount in USD: 1000
Enter rate of interest: 2.4
Enter time in years: 5
The interest amount is: 120.000000 USD

C Program to calculate Simple Interest with all real-life catches

The real catches/ changes will be:

• All principle, rate and time will be in float.
• Time can be in multiples of 0.25 only (as interest is deposited every 3 months)
• Total time should be less than 10.

We check the total time and return immediately if it is greater than the limit.

if(time > 10.0) {
    printf("Time should be less than 10 years");
    return 0;
}

We handle the time to be in multiples of 0.25 only. The idea is to get the integer part and check the remaining decimal part.

• If the decimal part is less than 0.25, it contributes 0.
• If the decimal part is less than 0.50, it contributes 0.25.
• If the decimal part is less than 0.75, it contributes 0.5.
• else the contribution is 0.75.

Following function handles this:

float roundRate(float rate) {
    int baseRate = floor(rate);
    float remainingRate = rate - baseRate;
    float finalRate = 0;
    if(remainingRate < 0.25)
        finalRate = baseRate;
    else if(remainingRate < 0.5)
        finalRate = baseRate + 0.25;
    else if(remainingRate < 0.75)
        finalRate = baseRate + 0.5;
    else
        finalRate = baseRate + 0.75;
    return finalRate;
}

Following is the C Program to calculate Simple Interest:

#include <stdio.h>
#include <math.h>

float calSimpleInterest(int principle, float rate, int time) {
    float simple_interest;
    simple_interest = (principle * rate * time) / 100;
    return simple_interest;
}

float roundRate(float rate) {
    int baseRate = floor(rate);
    float remainingRate = rate - baseRate;
    float finalRate = 0;
    if(remainingRate < 0.25)
        finalRate = baseRate;
    else if(remainingRate < 0.5)
        finalRate = baseRate + 0.25;
    else if(remainingRate < 0.75)
        finalRate = baseRate + 0.5;
    else
        finalRate = baseRate + 0.75;
    return finalRate;
}

int main() {
    int principle, time;
    float rate;
    float simple_interest;

    printf("Enter principle amount in USD: ");
    scanf("%d", &principle);

    printf("\nEnter rate of interest: ");
    scanf("%f", &rate);

    printf("\nEnter time in years: ");
    scanf("%d", &time);
    
    if(time > 10.0) {
        printf("Time should be less than 10 years");
        return 0;
    }
    
    rate = roundRate(rate);

    // Calculate simple interest
    simple_interest = calSimpleInterest(principle, rate, time);
    
    printf("\nThe interest amount is: %f USD\n", simple_interest);
    
    return 0;
}

Input + Output:

Enter principle amount in USD: 1200
Enter rate of interest: 2.57
Enter time in years: 5.49
The interest amount is: 150.000000 USD

With this article at OpenGenus, you must have the complete idea of how to implement a C program to calculate Simple Interest.