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Match the LIST-I with LIST-II

LIST-ILIST-II
A. The present value of a perpetuity of ₹3120 payable at the beginning of each year, if money is worth 6% effective.I. ₹2,00,000
B. The present value of a perpetuity of ₹5,000 payable at the end of each year, if money is worth 5% compounded annuallyII. ₹1,50,000
C. The present value of a sequence of payments of ₹3,000 payable at the end of each 6 months and continuing forever, if money is worth 4% compounded semi-annually.III. ₹1,00,000
D. The present value of a perpetuity of ₹3,000 payable at the end of each quarter, if money is worth 6% compounded quarterlyIV. ₹55,120

Choose the correct answer from the options given below:

Solution

✅ Correct Option: 3

A perpetuity paid at period end has present value Pi\frac{P}{i}. A is paid at the beginning, so its value is 3120+31200.06=551203120+\frac{3120}{0.06}=55120. B gives 50000.05=100000\frac{5000}{0.05}=100000, C gives 30000.02=150000\frac{3000}{0.02}=150000, and D gives 30000.015=200000\frac{3000}{0.015}=200000.

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