Choose the proper rationale. “In the compound interest equation, time (the variable t) has the biggest effect on the outcome because...”

Compound interest is calculated using a formula such as A = P(1 + r/n)^(nt). Time appears in the exponent, so increasing time compounds the growth repeatedly and can have a much larger effect than changing a factor by the same amount. The correct rationale is “Time is an exponent while the other units are factors.”

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