Find the principal that will amount to N1200 at $$ 5 \% $$ per annum for 3 years, to the nearest whole number $$ \begin{array}{lll} ext { (a) } 22560 & ext { (b) N3050 } \ ext { (c) N1043 } & ext { (d) } \$ 5000\end{array} $$

Question

Find the principal that will amount to N1200 at $$ 5 \% $$ per annum for 3 years, to the nearest whole number $$ \begin{array}{lll}	ext { (a) } 22560 & 	ext { (b) N3050 } \ 	ext { (c) N1043 } & 	ext { (d) } \$ 5000\end{array} $$

UpStudy AI · Accepted Answer

To find the principal amount that will amount to N1200 at a rate of 5% per annum for 3 years, we can use the formula for compound interest:

$$
A = P(1 + r)^t
$$

Where:
- $$ A $$ is the amount of money accumulated after n years, including interest.
- $$ P $$ is the principal amount (the initial amount of money).
- $$ r $$ is the annual interest rate (decimal).
- $$ t $$ is the time the money is invested or borrowed for, in years.

In this case:
- $$ A = 1200 $$
- $$ r = 5\% = 0.05 $$
- $$ t = 3 $$

We need to find $$ P $$. Rearranging the formula gives us:

$$
P = \frac{A}{(1 + r)^t}
$$

Substituting the known values:

$$
P = \frac{1200}{(1 + 0.05)^3}
$$

Calculating $$ (1 + 0.05)^3 $$:

$$
(1 + 0.05)^3 = (1.05)^3 = 1.157625
$$

Now substituting this back into the equation for $$ P $$:

$$
P = \frac{1200}{1.157625} \approx 1036.73
$$

Rounding to the nearest whole number, we get:

$$
P \approx 1037
$$

Looking at the options provided, the closest value is:

(c) N1043

Thus, the answer is **(c) N1043**.
The principal amount is approximately N1043.

Find the principal that will amount to N1200
at per annum for 3 years, to the nearest
whole number

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Find the principal that will amount to N1200 at per annum for 3 years, to the nearest whole number