Question 6
Commercial ArithmeticA man wishes to keep some money in savings deposit at 25% compound interest so that after 3 years he can buy a car for N150000. How much does he need to deposit now?
- A.N112 000.50
- B.N96 000.00
- C.N85 714.28
- D.N76 800.00
Show the answer and explanation
Answer: D (N76 800.00)
Explanation
The deposit P must satisfy P × 1.253 = 150 000. Since 1.253 = 1.953125, P = 150 000 ÷ 1.953125 = N76 800.