Use the formula: A = P(1 + r/n)^(nt)

Sun, 03 May 2026 08:26:22 +0000

# Understanding and Using the Compound Interest Formula: A = P(1 + r/n)^(nt) When it comes to growing your savings through investments or loans, few formulas are as important—and widely used—as A = P(1 + r/n)^(nt). This elegant compound interest formula allows anyone, from beginners to financial professionals, to calculate how money grows over time when interest is compounded periodically. Whether you're saving for retirement, funding education, or planning a major purchase, understanding this formula empowers smarter financial decisions. ## What Is the Compound Interest Formula? The compound interest formula A = P(1 + r/n)^(nt) calculates the future value (A) of an investment or loan after a given time period, given the initial principal (P), annual interest rate (r), number of compounding periods per year (n), and total time in years (t).