Which concept is described by the formula A = P(1 + r/n)^(nt) with n compounding periods per year?

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This is about compound interest. The formula shows how much a lump sum grows when interest is added to the principal multiple times per year. A is the amount after t years, P is the initial principal, r is the annual interest rate (as a decimal), n is how many times per year interest is compounded, and nt is the total number of compounding periods. The growth factor per period is (1 + r/n), and applying it nt times gives A = P(1 + r/n)^(nt). Because you earn interest on both the original principal and on previously earned interest, the growth is exponential, matching how compound interest works.

This differs from simple interest, where interest is earned only on the principal, not on interest accumulated. It also isn’t about the future value of an annuity, which involves a stream of payments, nor present value, which discounts future money to today.