Statistics & Applications

Financial Math

Easy

applied

The term of the perpetuity is

Infinite

finite

between 0 to 100

we can't say about term.

✅ Correct Option: 1

A perpetuity is a series of payments that continues forever without stopping.

The term "perpetuity" comes from "perpetual," which means lasting forever or indefinitely.

By definition, a perpetuity has no end date. The payments continue infinitely into the future.

For example, a perpetuity that pays $100 every year will make this payment every year forever, with no final payment or termination date.

Since the payments never stop and continue indefinitely, the term (duration) of a perpetuity is infinite.

A finite term would imply the payments stop at some point, which contradicts the definition of perpetuity.

A term between 0 to 100 would also be finite and limited, which is not the case.

Therefore, the term of a perpetuity is infinite.

2025: 14 May Shift 1

An annuity in which the periodic payment begin on a fixed date and continue forever is called

2025: 15 May Shift 1

Mr. X invested Rs. 4,00,000 in shares for 5 years. The value of this investment was Rs. 4,50,000 at the end of the second year, Rs. 490000 at the end of the third year and on maturity, the final value stood at Rs. 6,00,000. The compound annual growth rate of this investment is:

[Given that: $(1.5)^{1/5} = 1.084]$

2024: 16 May Shift 1

A Multinational company creates a sinking fund by setting a sum of ₹ $12,000$ annually for $10$ years to pay off a bond issue of ₹ $72,000$ . If the fund accumulates at $5 \%$ per annum compound interest, then the surplus after paying for bond is :

(Use $\left.(1.05)^{10} \approx 1.6\right)$

2026: 19 May Shift 2

A person has invested ₹ 20,000 in hundred-rupees bond and redeemable at the end of 10 years at 110, and paying annual dividends at 4%. The yield rate is to be 5% effective. Then which of the following statements are TRUE?

A. The annual dividend is ₹ 800.

B. The annual dividend is ₹ 1200.

C. Redemption price is ₹ 22000.

D. Redemption price is ₹ 20000.

Choose the correct answer from the options given below:

2026: 19 May Shift 1

Jemina invested ₹ 50,000 in a mutual fund in 2019. The value of the mutual fund increased to ₹ 80,000 in 2024. The percentage of CAGR (Compound Annual Growth Rate) of her investment is: [Use $(1.6)^{1/5} = 1.098$ ]

2026: 25 May Shift 1

A money-lender charges interest at the rate of 10 rupees per 110 rupees semi-annually, payable in advance. Then

Match the LIST-I with LIST-II

LIST-I	LIST-II
A. rate per conversion period ( $i$ )	I. 2
B. nominal rate (r)%	II. 21
C. number of period in a year (m)	III. 20
D. effective rate of interest ( $r_e$ )%	IV. 0.1

Choose the correct answer from the options given below:

The term of the perpetuity is

Solution

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