Your solution of storing the equation in RTF format and then showing it in a RTF field sounds completely feasible so I'd say it's already a proper solution.
However, Crystal Reports has limitations concerning RTF tags so this could be the source of the problem. For supported tags, have a look at
1214798 - What RTF tags are supported in Crystal Reports? | SAP Knowledge Base Article[
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If the support for RTF in Crystal is not enough for your needs, perhaps you could convert the RTF into an image and display the image in the report. For more information, have a look at this conversation:
[C#] RTF text to bitmap image? Any easy way around?[
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If changing the report tool is really an option for you, I'd give for example DevExpress or SyncFusion a try...