At 4% converted half yearly,the present value of a perpetuity of ₹800 payable at the end of each half year is :
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → ₹40,000
The present value of a perpetuity,
$PV=\frac{\text{Payment Period}}{\text{Rate per period (semi-annually)}}$
$=\frac{800}{0.02}=₹40,000$