If the present value of perpetuity of ₹600 payable at the end of every six months is ₹18000, then the rate of interest is :
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → $\frac{20}{3}$ % per annum
To find the rate of interest,
$PV=\frac{A}{r}$
$⇒r=\frac{A}{PV}=\frac{60}{18000}≃0.033$
∴ Annual rate = $0.033 × 2 = 0.066$
$≃6.66\%$