Find, correct to nearest naira,the compound interest on N85750 for 3 years at 5%?
Reiny told you how to do it.
What is
85750(1.05)^3 - 85750 ?
Don’t be rude, Hafsat.
To find the compound interest, we can use the formula:
A = P(1 + r/n)^(nt)
Where:
A = the final amount
P = the principal amount (initial investment)
r = annual interest rate (as a decimal)
n = number of times that interest is compounded per year
t = number of years
In this case:
P = N85750
r = 5% = 0.05
n = 1 (compounded annually)
t = 3 years
Now we can substitute the values into the formula and calculate the compound interest:
A = N85750 * (1 + 0.05/1)^(1*3)
A = N85750 * (1.05)^3
A ≈ N85750 * 1.157625
A ≈ N99140.42
So, the compound interest on N85750 for 3 years at 5% is approximately N99140.42.
Note: Since the question asks for the answer to the nearest naira, we can round off the answer to the nearest whole number. Thus, the compound interest would be N99140.