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 \div 100)\(^n\). Find A, if P = 126, r = 4 and n = 2.
A
N132.50K
B
N136.30K
C
N125.40K
D
N257.42K
Verified Correct Answer: B.
Step-by-Step Mathematical Solution
\( A = P \left(1 + \frac{r}{100}\right)^n \)
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
Source: Myschool Past Questions Archive (Record #40642)