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JAMB Mathematics 1981 Question 8

Question 8

Commercial Arithmetic

A sum of money invested at 5% per annum simple interest amounts to $285.20 after 3 years. How long will it take the same sum to amount to $434.00 at 7½% per annum simple interest?

  1. A.7½ years
  2. B.10 years
  3. C.5 years
  4. D.12 years
  5. E.14 years.
Show the answer and explanation

Answer: B (10 years)

Explanation

After 3 years at 5% the amount is 1.15P = 285.20, so P = $248. The interest needed is 434 − 248 = $186, and 248 × 7.5% = $18.60 a year, so it takes 186 ÷ 18.60 = 10 years.