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In design of microwave wireless communication or optical communication systems, reliable and effective computational method is required to evaluate performance of devices such as for filtering, guiding, and dividing. Recently, photonic crystal (PC) or electromagnetic band gap (EBG) structure, which are composed of periodic profile of medium with high contrast for background, is intensively studied because of high selectivity for wavelength, easy design to confine electromagnetic wave effectively within a defect of the structure, and so on. In this paper, numerical analysis of scattered electromagnetic wave in free space by a dielectric cylinder with high dielectric constant is demonstrated by constrained interpolation profile (CIP) method. Comparing with conventional Finite Difference Time Domain (FDTD) method under the same discretization of space and time, the CIP method showed better agreement with results of approximated analytical approach by Hertz potentials in wide variety of relative dielectric constant from 4 to 36. As an application of CIP method, Mach-Zehnder interferometer which is situated in pillar type PC structure is analyzed. The numerical result could well explain output performance of microwave experiment around 4 GHz.