CUET Preparation Today
At what rate of interest will the present value of a perpetuity of ₹1,000 payable at the end of every 6 months be ₹20,000 ? |
15% 10% 20% 5% |
10% |
The correct answer is Option (2) → 10% The present value of a perpetuity, $PV=\frac{A}{r}$ $⇒20,000=\frac{1,000}{r}$ $⇒r=0.05$ ∴ Annual Rate = $0.05×2=0.10=10\%$ |
