Find the compound interest (CI) on ₦15,700 for 2 years at 8% per annum compounded annually.
- ₦6,212.48
- ₦2,834.48
- ₦18,312.48
-
₦2,612.48
The correct answer is: D
Explanation
Principal (P) = ₦15,700
Rate (R) = 8
Number of years (t) = 2
A = P \((1+\frac{R}{100})^t\)
⇒ A = 15700 \((1+\frac{8}{100})^2\)
⇒ A = 15700 (1 + 0.08)\(^2\)
⇒ A = 15700 (1.08)\(^2\)
⇒ A = 15700 x 1.1664
⇒ A = ₦18,312.48
Total amount, A = ₦18,312.48
A = P + CI
⇒ CI = A - P
⇒ CI = 18,312.48 - 15,700
∴ CI = ₦2,612.48
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