Question

What sum of money will amount to ₹ 5618 in 2 years at 6% per annum compounded yearly?

Answer 1

Given:

• Amount, (A = ₹ 5618)
• Time, (n = 2) years
• Rate of interest, (r = 6%) per annum compounded yearly

We need to find the principal, (P).

Step-wise calculation:

1. The formula for compound amount is:

`A = P(1 + r/100)^n`

2. Substitute the given values:

`5618 = P(1 + 6/100)^2`

`5618 = P xx (106/100)^2`

`5618 = P xx 106/100 xx 106/100`

`5618 = P xx 11236/10000`

3. Solve for (P): 

`P = (5618 xx 10000)/11236`

`P = 56180000/11236 ≈ 5000`

The sum of money (principal) is approximately ₹ 5000.

Hence, ₹ 5000 will amount to ₹ 5618 in 2 years at 6% per annum compounded yearly.