Step 1: Formula for potential energy in a simple pendulum.
The potential energy at the extreme position (where the amplitude is \( A \)) is given by:
\[
PE = mgh
\]
where \( h \) is the height raised by the pendulum. For small oscillations, \( h = L(1 - \cos \theta) \), where \( \theta \) is the angle corresponding to the extreme position.
Step 2: Using the amplitude.
For maximum displacement \( A \), the potential energy becomes:
\[
PE = \frac{mgA^2}{2L}
\]
Step 3: Conclusion.
Thus, the correct answer is (A) \( \frac{mgA^2}{2L} \).