Calculate the length of time for 800000naira to earn 15000naira if invested at 10% per annum

Answer 1

To calculate the length of time it will take for 800,000 naira to earn 15,000 naira at a 10% interest rate per annum, we can use the formula for compound interest:

A = P(1 + r/n)^(nt)

Where:
A = the final amount (800,000 naira + 15,000 naira = 815,000 naira)
P = the principal amount (800,000 naira)
r = annual interest rate (10% = 0.10)
n = number of times interest is compounded per year (we'll assume it is compounded annually, so n = 1)
t = number of years

Substituting the given values into the formula:

815,000 = 800,000(1 + 0.10/1)^(1*t)

Now, let's isolate t:

(1.01875)^t = 815,000/800,000
1.01875^t = 1.01875
t = log(1.01875)/log(1.01875)
t ≈ 1

Therefore, it will take approximately 1 year for 800,000 naira to earn 15,000 naira if invested at a 10% interest rate per annum.