Find the compound interest CI on 15 700 for 2 y... - JAMB Mathematics 2023 Question

The formula for compound interest is given by:

\[ A = P \left(1 + \frac{r}{100}\right)^t \]

where:
- \(A\) is the amount after \(t\) years,
- \(P\) is the principal amount (initial amount),
- \(r\) is the annual interest rate, and
- \(t\) is the number of years.

The compound interest (\(CI\)) is then given by:

\[ CI = A - P \]

Let's calculate the compound interest for ₦15,700 at 8% per annum compounded annually for 2 years.

\[ A = 15,700 \left(1 + \frac{8}{100}\right)^2 \]

\[ A = 15,700 \times \left(1 + \frac{2}{25}\right)^2 \]

\[ A = 15,700 \times \left(\frac{27}{25}\right)^2 \]

\[ A = 15,700 \times \frac{729}{625} \]

\[ A = 18,312 \]

Now, calculate the compound interest:

\[ CI = A - P \]

\[ CI = 18,312 - 15,700 \]

\[ CI = 2,612 \]

Therefore, the correct answer is ₦2,612.48