If we want ₹8,640 three years from now and the compounded interest rate is 20% p.a how much should we invest today? (assuming interest is compounded yearly)

₹6,000

The Formula that we used here is -

Amount = P$(1 \;+\; \frac{R}{100})^t$

8640 = P [ 1 + \(\frac{20}{100}\) ]³

8640 = P [ \(\frac{6}{5}\) ]³

8640 × \(\frac{5}{6}\) × \(\frac{5}{6}\) = P

P = 6000