Rividha Enterprises gives an increasing dividend each year for holding its shares. If the dividend is compounded annually at the rate of 5%, 6% and 7% for 1^st, 2^nd and 3^rd years, then what sum (principal) will amount to Rs. 5,87,945 at compound interest in 3 years?

Using the successive percentage change formula, the total amount equals Principal times 1.05 times 1.06 times 1.07. We set this equal to 587945, so the principal is 587945 divided by the product of 1.05, 1.06, and 1.07. Calculating this gives 587945 divided by 1.19091, which means the original sum is Rs. 4,93,694.

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