A farmer has an increase of 12.5% in the output of wheat in his farm every year. This year, he produced 2,916 quintals of wheat. What was his annual production of wheat 2 years ago?

Given,

P = 2916 quintals

R = 12.5% p.a.

n = 2 year

By formula,

Wheat production before n years = $\dfrac{P}{\Big(1 + \dfrac{r}{100}\Big)^n}$

Substituting the values in formula,

$\text{Wheat production before 2 years }= \dfrac{2916}{\Big(1 + \dfrac{12.5}{100}\Big)^2} \\[1em] = \dfrac{2916}{\Big(\dfrac{100 + 12.5}{100}\Big)^2} \\[1em] = \dfrac{2916}{\Big(\dfrac{112.5}{100}\Big)^2} \\[1em] = \dfrac{2916}{\dfrac{12656.25}{10000}} \\[1em] = \dfrac{2916 \times 10000}{12656.25} \\[1em] = 2304$

Hence, farmer's annual production of wheat 2 years ago = 2304 quintals.