Question

Continuously Compounded Interest Quick Check
2 of 52 of 5 Items


Question
The function A=P(1+rn)nt
, where A is the amount of money in the account after compounding, P is the principal, r is the interest rate expressed as a decimal, n is the number of compounding periods, and t is time in years used to calculate the balance in an account with compound interest.

Select the correct answer from the list.

(1 point)
The function is a
function.

Answer 1

The function described is a **compound interest** function. However, note that the specific formula provided seems to mix notations for different types of compounding. For continuously compounded interest, the formula is generally expressed as:

\[ A = Pe^{rt} \]

where \( e \) is the base of the natural logarithm. Your formula seems to imply periodic compounding instead.

If your question is asking for what type of function it represents, it is a **mathematical function** used to calculate compound interest. If you are looking for more specifics, the correct terminology would be **exponential function** when describing the nature of the growth exhibited by this formula.