The amount A to which a principal P amounts at r% compound interest for n years is given by the formula A = P(1 + (r ÷ 100)(^n). Find A, if P = 126, r = 4 and n = 2.
-
A.
N132.50K -
B.
N136.30K -
C.
N125.40K -
D.
N257.42K
Correct Answer: Option B
Explanation
( A = P left(1 + frac{r}{100}right)^n )
Where P = 126, r = 4,n = 2
A=126 ( left(1 + frac{4}{100}right)^2 text{Using LCM} )
=126 ( left(frac{100+4}{100}right)^2 = 126 left(frac{104}{100}right)^2 )
=126 ( left(1.04^2 right) )
= 126 * 1.04 * 1.04
=136.28
A = 136.30 (approx.)
The Amount A, = N136.30k
There is an explanation video available below.