Finance Cheat Sheet

Compound Interest Formula Cheat Sheet

Published September 8, 2026

The compound interest formula and what each variable means. For the reasoning behind it, see Compound Interest Explained.

A = P(1 + r/n)ⁿₜ
A = final amount, P = principal, r = annual rate (decimal), n = compounding periods per year, t = years

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Frequently Asked Questions

What does “n” mean in the formula?

How often interest compounds per year: 1 for annually, 12 for monthly, 365 for daily. More frequent compounding produces slightly more growth for the same rate.

How is this different from simple interest?

Simple interest is only ever calculated on the original principal. Compound interest is calculated on the principal plus all previously earned interest, so growth accelerates over time.

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