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WAEC 2023 · Paper 2 · Q1

A village estimates ₦1,049,740.00 for a water project. The sum of ₦400,000.00 is realised through communal donation and deposited in a bank at a compound interest of 10%10\% per annum. If the village chief adds ₦100,000.00 to the amount in the account at the end of each year, how long will it take to realise the estimate?

  1. (a)

    Number of years

Worked solution (try it first)

(a)

  1. Work year by year: add 10%10\% interest (× 1.1), then the chief's ₦100,000.
  2. End of year 1: 400 000×1.1+100 000=540 000400\,000 \times 1.1 + 100\,000 = 540\,000.
  3. Year 2: 540 000×1.1+100 000=694 000540\,000 \times 1.1 + 100\,000 = 694\,000.
  4. Year 3: 694 000×1.1+100 000=863 400694\,000 \times 1.1 + 100\,000 = 863\,400.
  5. Year 4: 863 400×1.1+100 000=1 049 740863\,400 \times 1.1 + 100\,000 = 1\,049\,740.
  6. The estimate of ₦1,049,740 is reached after 4 years.

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