Question

What sum will become $\text{Rs.}5408$ after $2$ years at $4$ per annum when the interest is compounded annually?

Answer 1

Total Amount, $A=P{(1+\frac{r}{100})}^t$

$5408=P(1+0.04{)}^2$

$5408=P(1.04{)}^2$

$\frac{5408}{1.0816}=P$

$P=\text{Rs}5000$