I have been studying for a mathematics entrance test and the following problem came up on the practice exam:

Capital K is deposited at an annual interest rate of 4%. Interest is compounded

once a year. In fifteen years time the capital has grown to an amount of

108056.62 euro. Compute the principal capital K.

Could anyone suggest a formula/formulas for solving this problem. Also, could anyone suggest an area of mathematics to concentrate my efforts toward problems such as the above.

Thank you,

Matty