The present value of a perpetuity of ₹6,240 payable at the beginning of each year, if money is worth 10% effective, is:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → ₹68,640
To calculate a present value of a perpetuity,
$PV=\frac{C}{r}×(1+r)$
$=\frac{6240}{0.10}×(1+0.10)=68,640$