The compound interest earned by Sunil on a certain sum at the end of two years at the rate of 16% p.a., when interest is compounded annually, was ₹864. What was the sum invested by Sunil?

$$compound\ interest=principal\left[\left(1+\frac{Rate}{100}\right)^{time}\ -1\right]$$

The compound interest earned by Sunil on a certain sum at the end of two years at the rate of 16% p.a., when interest is compounded annually, was ₹864.

$$864=principal\left[\left(\frac{116}{100}\right)^2\ -1\right]$$

$$864=principal\left[\left(\frac{13456}{10000}\ -1\right)\right]$$

$$864=principal\left[\frac{3456}{10000}\right]$$

$$864\times\ \frac{10000}{3456}=principal$$

$$\frac{10000}{4}=principal$$

principal = 2500
So the sum invested by Sunil is 2500.