Question 9

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Jambmaths question: 

A man wishes to keep some money in a saving deposit at 25% compound interest, so that after 3 years he can buy a car for N150,000. How much does he need to deposit now?

Option A: 

N76,800.00

Option B: 

N85,714.28

Option C: 

N96,000.00

Option D: 

N112,000.50

Jamb Maths Solution: 

$\begin{align}  & A=P{{(1+r)}^{n}}\text{    (compound interest formula)} \\ & P=?,\text{ }r=0.25,\text{ }n=3,\text{ }A=150,000 \\ & A=150,000=P{{(1+0.25)}^{3}} \\ & 150,000=P{{(1.25)}^{3}} \\ & \frac{150,000}{{{1.25}^{3}}}=P \\ & P=\frac{150,000}{{{1.25}^{3}}}=\frac{150,000}{1.953125}=N76,800 \\\end{align}$

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