S = P(1 + r)^n

Tue, 05 May 2026 21:11:21 +0000

# Understanding S = P(1 + r)^n: The Simple Compound Interest Formula When it comes to growing money over time, one of the most fundamental equations in personal finance and investing is the simple compound interest formula: S = P(1 + r)^n This formula helps explain how an initial principal amount (P) grows into a larger sum (S) over time (n), assuming a fixed annual interest rate (r) is compounded annually. Whether you're saving for retirement, investing in a savings account, or planning your financial future, mastering this equation is essential. ---