I have a question regarding the loan payment formula shown below.

Calculating the Payment Amount per Period

The formula for calculating the payment amount is shown below.

Simple Amortization Calculation Formula

A = P X r(1 + r)n over (1 + r)n - 1

where

A = payment Amount per period

P = initial Principal (loan amount)

r = interest rate per period

n = total number of payments or periods

Is this formula/calculation a condensed version of a longer calculation? I am curious to know how the (1 +r)n - 1 was developed from the longer calculation. For example, r(1 + r)n may have been (r + rn)n. The n's are exponents.

I thank you for whatever helpful explanation that may be provided.

Kenneth