Question:
What sum of money will amount to Rs $45582.25$ at $6 \frac{3}{4} \%$ per annum in two years, interest being compounded annually?
Solution:
$\mathrm{A}=\mathrm{P}\left(1+\frac{\mathrm{R}}{100}\right)^{\mathrm{n}}$
$45,582.25=\mathrm{P}\left(1+\frac{27}{400}\right)^{2}$
$\mathrm{P}(1.0675)^{2}=45,582.25$
$\mathrm{P}=\frac{45,582.25}{1.13955625}$
$\mathrm{P}=40,000$
Thus, the required sum is Rs 40,000 .