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The present value of a perpetual income of ₹ xx payable at the end of each 6 months is ₹ 1,80,000. If the money is worth 5% compounded semi-annually, then the value of xx is ₹ :

Solution

✅ Correct Option: 1

Semi-annual rate i=2.5%=0.025i = 2.5\% = 0.025.

PV of perpetuity =xi= \frac{x}{i}.

1,80,000=x0.025⇒x=45001,80,000 = \frac{x}{0.025} \Rightarrow x = 4500.

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