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: 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
