A man wishes to keep his money in a savings deposit at 25% compound interest so that after three years he can buy a car for ₦150,000. How much does he need ...

A man wishes to keep his money in a savings deposit at 25% compound interest so that after three years he can buy a car for ₦150,000. How much does he need to deposit?

Answer Details

Amount A = P(1+r)n;
A = ₦150,000, r = 25%, n = 3.
150,000 = P(1+0.25)3 = P(1.25)3
P = 150,000/1.253 =₦76,800.00