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.

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".