Target Exam

CUET

Subject

-- Applied Mathematics - Section B2

Chapter

Financial Mathematics

Question:

The money needed to invest now; so as to get ₹7500 at the beginning of each month forever (starting from the current month) if the money is worth 9% per annum compounded monthly is,

Options:

₹10,05,000

₹9,05,000

₹10,07,500

₹9,50,000

Correct Answer:

₹10,07,500

Explanation:

The correct answer is Option (3) → ₹10,07,500

The formula for the present value of a perpetuity due is,

$PV=\frac{A}{r}(1+r)$

$=\frac{75000}{0.0075}×(1+0.0075)$

$=₹10,07,500$