If the cash equivalent of a perpetuity of ₹1200 payable at end of each half year is ₹96,000, the annual rate of interest compounded half yearly is :

2.5%

$\text{Present value of perpetuity}=96000.$

$\text{Payment each half year}=1200.$

$\text{For perpetuity: }PV=\frac{R}{i}.$

$96000=\frac{1200}{i}.$

$i=\frac{1200}{96000}.$

$i=0.0125.$

$\text{Half-yearly rate}=1.25\%.$

$\text{Annual nominal rate (compounded half yearly)}=2\times1.25\%.$

$=2.5\%.$

$\text{Annual rate of interest}=2.5\%.$