The present value of perpetuity income of ₹x at the end of each 6 months is ₹40,000. If money is worth 6% compounded semi annually, then x is :
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → ₹1200
The present value of a perpetuity is,
$PV=\frac{x}{r}$
$⇒40,000=\frac{x}{0.03}$
$⇒x=1,200$