If the money is worth 8% per annum compounded semi-annually, then the present value of a sequence of payments of ₹1,000 made at the end of every 6 months and continuing forever, is:

₹25,000

The correct answer is Option (2) → ₹25,000

Rate of interest per half year

$=\frac{8}{2}=4\%=\frac{4}{100}$

Each payment $=1000$

For a perpetuity, present value is

$PV=\frac{R}{i}$

Here $R=1000$ and $i=\frac{4}{100}$

$PV=\frac{1000}{\frac{4}{100}}$

$=1000\times\frac{100}{4}$

$=25000$

Present value $=25000$