Question

Find the interest on naira 40000.00 for 2 years at 20% per annum compound interest. Please I need the answer ASAP

Answer 1

Given:

Principal value = 40000

Rate of compounded interest = 20%

Time = 2 years

To find:

The interest.

Solution:

Formula for amount is

$A=P\left(1+\dfrac{r}{100}\right)^t$

Where, P is principal, r is rate of interest and t is time in years.

Putting the given values, we get

$A=40000\left(1+\dfrac{20}{100}\right)^2$

$A=40000\left(1+\dfrac{1}{5}\right)^2$

$A=40000\left(\dfrac{6}{5}\right)^2$

$A=40000\left(\dfrac{36}{25}\right)$

$A=57600$

Now, the formula for interest is

$I=A-P$

$I=57600-40000$

$I=17600$

Therefore, the amount of compound interest is 17,600.