The present value of a perpetuity of ₹1,500 payable at the beginning of each year, if money is worth 6% per annum is :
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → ₹26,500
To calculate the present value of a perpetuity,
$PV=\frac{C}{r}×(1+r)$
$=\frac{1,500}{0.06}×(1+0.06)$
$=25,000×1.06$
$=26,500$