What does the A stand for in the compound interest formula A= P(1+1)^t?
A total interest
B total principle borrowed
C total interest and principal
D All american amount
In the compound interest formula A = P(1 + r/n)^(nt), the letter "A" stands for the final amount or the total amount accumulated after the interest is compounded. So, the correct answer is:
C) total interest and principal
To get this answer, let's break down the components of the formula:
- P represents the principal amount (the initial amount of money borrowed or invested).
- r represents the interest rate per compounding period.
- n represents the number of times the interest is compounded per time period.
- t represents the number of time periods the money is invested or borrowed for.
By substituting the values of P, r, n, and t into the formula, you can calculate the final amount (A) which includes both the principal and the accumulated interest.