The amount A to which a principal P amounts at r% compound interest for n years is given by the formula A = P(1 + (r ÷ 100) $^n$ . Find A, if P = 126, r = 4 and n = 2.

N132.50K

N136.30K

N125.40K

N257.42K

Correct answer is B

$A = P \left(1 + \frac{r}{100}\right)^n$

Where P = 126, r = 4,n = 2

A=126 $\left(1 + \frac{4}{100}\right)^2 \text{Using LCM}$

=126 $\left(\frac{100+4}{100}\right)^2 = 126 \left(\frac{104}{100}\right)^2$

=126 $\left(1.04^2 \right)$

= 126 * 1.04 * 1.04

=136.28

A = 136.30 (approx.)

The Amount A, = N136.30k

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