A sum of money deposited at 2% per annum compounded annually becomes Rs 10404 at the end of 2 years.
Question:
A sum of money deposited at 2% per annum compounded annually becomes Rs 10404 at the end of 2 years. Find the sum deposited.
Solution:
$\mathrm{A}=\mathrm{P}\left(1+\frac{\mathrm{R}}{100}\right)^{\mathrm{n}}$
$10,404=\mathrm{P}\left(1+\frac{2}{100}\right)^{2}$
$10,404=\mathrm{P}(1.02)^{2}$
$\mathrm{P}=\frac{10,404}{1.0404}$
$\mathrm{P}=10,000$
Thus, the required sum is Rs 10,000 .