The expression can be used to find the total amount in a bank account when the principal dollar amount, P(1+r), is compounded annually for n years at an interest rate of r. Which of the following statements is true? The quantity(1+r) is multiplied by P. The quantity is (n+n.r) multiplied by P. The quantity is (1+r) multiplied by itself n times. The quantity is P(1+r) multiplied by itself n times.
Accepted Solution
A:
Answer
The quantity is (1+r) multiplied by itself n times
Explanation
From the question m is missing. The expression should be, P〖(1+r)〗^n.
The expression means;
1). First, add r to 1.
2). The quantity (1+r) multiply by itself n times.
3). Lastly, the quantity 〖(1+r)〗^n is multiplied by P.
From the choices given, the true statement about the expression is the 3rd one, “the quantity is (1+r) multiplied by itself n times”.