A Sum of money was invested at compound interest....?

Question

.. for 2 years. The interest rate for each year was 5%.
After the 2 years the sum amounted to €5512.50
Calculate the original sum of money invested.

This was a question for an exam on one of my sister's exams, can anyone help i havent a clue

Answer 1

Total = principal (1 + i)^n

5512.50 = principal (1.05)^2

principal = 5512.50/1.1025

principal = 5,000.00
.