FV = P(1 + r)^n

Sun, 03 May 2026 13:42:46 +0000

# Understanding FV = P(1 + r)^n: The Core of Compound Interest Introduction When it comes to growing savings, investments, or loans, one of the most essential formulas in finance is FV = P(1 + r)^n. This equation defines the concept of compound interest—a powerful financial principle that shapes how money grows (or grows out) over time. Whether you're planning your retirement, investing in a CD, or paying off debt, understanding this formula is key to making informed financial decisions. --- ## What Does FV = P(1 + r)^n Mean?