Amount = Principal \((1 + ext{rate})^{ ext{time}}\)

Sat, 02 May 2026 13:09:06 +0000

# Understanding the Compound Interest Formula: Principal × (1 + Rate)^Time One of the most fundamental concepts in finance is compound interest, mathematically expressed as: Principal × (1 + Rate)^Time This formula is essential for anyone interested in saving, investing, or managing debt. In this article, we’ll break down each component of the formula, explain how it works, and explore its real-world applications in personal finance and wealth growth.