Mr. Sohan is planning to buy a mobile after two years time from now. He expects that after two years he will need Tk. 18150 to buy the mobile. How much money does Mr. Sohan need to invest now at 10% interest rate compounded annually?

Question: Mr. Sohan is planning to buy a mobile after two years time from now. He expects that after two years he will need Tk. 18150 to buy the mobile. How much money does Mr. Sohan need to invest now at 10% interest rate compounded annually?

Solution:
Given,
Compounded Amount = Tk. 18150
Time n = 2 years
Rate r = 10% = 10/100 = 1/10

We know,
Compounded Amount = P(1 + r)ⁿ
⇒ 18150 = P(1 +1/10)²
⇒ 18150 = P(11/10)²
⇒ 18150 =121P/100
⇒ 121P =18150 × 100
⇒ P =1815000 ÷ 121
∴ P = 15000