is compound interest exponential growth
HydroPower Engineering One very important exponential equation is the compound-interest formula: ...where A is the ending amount, P is the beginning amount (or principal), r is the interest rate (expressed as a decimal), n is the number of compoundings a year, and t is the total number of years. Compound Interest Calculator Compound Interest Calculator. Compound Interest Formula. Compound interest - meaning that the interest you earn each year is added to your principal, so that the balance doesn't merely grow, it grows at an increasing rate - is one of the most useful concepts in finance. It is the basis of everything from a personal savings plan to the long term growth of the stock market.