Question : The number of trees in a town is 17640. If the number of trees increases annually at a rate of 5%, how many trees were there two years ago?
Option 1: 14000
Option 2: 15000
Option 3: 16000
Option 4: 19450
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Correct Answer: 16000
Solution :
Let the number of trees 2 years ago be $P$.
The number of trees increases annually at a rate of 5%.
The number of trees at present is 17640.
So, $P(1+\frac{r}{100})^n = 17640$
⇒ $P(1+\frac{5}{100})^2 = 17640$
⇒ $P(\frac{21}{20})^2 = 17640$
⇒ $P = 16000$
Hence, the correct answer is 16000.
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