NECO 2023 · Paper 1 · Q9

Calculate the compound interest on ₦1,200.00 for 4 years at $8\%$ per annum.

Worked solution (try it first)

At $8\%$ compound interest the money is multiplied by $1.08$ each year, so after 4 years it is $1200 \times 1.08^4$ .
$1.08^4 = 1.36049$ , so the amount is $1200 \times 1.36049 =$ ₦1,632.59.
The interest is the amount minus the principal: $1632.59 - 1200 =$ ₦432.59, option C.