A sum amounts to Rs 756.25 at 10% per annum in 2 years, compounded annually. Find the sum.

Explanation

Given:
Amount` (A)=Rs.756.25`
Rate`=10%` per annum
Time period `(n)=2` years.
As we know that,
`A=P(1+R/100)^n`
`756.25=P(1+10/100)^2`
`756.25=P(1+1/10)^2`
`756.25=P((10+1)/10)^2`
`756.25=P(11/10)^2`
`756.25=P(11/10)times(11/10))`
`756.25=P(121/100)`
`P=(756.25times100)/121`
`P=Rs.625`
Hence, the principal amount is `Rs.625`.