The sum of money invested to establish a scholarship of ₹5000, which is to be awarded at the end of every year forever, if money is worth 8% per annum (in ₹) is :
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → 62,500
Present value = $\frac{Annual\,Payment}{Interest\,rate}$
Present value = $\frac{5000}{0.08}$
$=\frac{5000}{\frac{8}{100}}$
$=62,500$