At what rate of interest will the present value of a perpetuity of ₹600 payable at the end of every 3 months be ₹18,000?

13.33%

The correct answer is Option (3) → 13.33%

Given:

Perpetuity payment: $R = 600$ (quarterly)

Present value: $PV = 18000$

Interest rate per quarter: $i_q$

Formula for present value of perpetuity: $PV = \frac{R}{i_q}$

Substitute values:

$18000 = \frac{600}{i_q}$

$i_q = \frac{600}{18000} = \frac{1}{30} \approx 0.03333$

Convert to annual nominal rate (quarterly compounding): $i_{annual} = i_q \times 4 = \frac{1}{30} \times 4 = \frac{4}{30} = \frac{2}{15} \approx 0.1333 = 13.33\%$