<human>:  How does the Compound Interest formula work?
<bot>: The compound interest formula is used to calculate the amount of growth in an investment over a period of time. It is calculated by multiplying the initial principal amount by one plus the annual interest rate to the power of the number of compound periods. The formula can be expressed as A = P (1 + r/n) ^nt where A is the amount, P is the principal balance, r is the interest rate (expressed as a decimal), n is the number of times the interest is compounded per year, and t is the number of years the money is invested.