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CUET · MATHS · PYQ PAPER 2025

At what rate of interest will the present value of a perpetuity of ₹ 500 payable at the end of every 6 months be ₹ 20,000 ?

  1. A \(10\%\) per annum
  2. B \(20\%\) per annum
  3. C \(5\%\) per annum
  4. D \(7\%\) per annum
Verified Solution

Answer & Solution

Correct Answer

(C) \(5\%\) per annum

Step-by-step Solution

Detailed explanation

\( PV = \frac{A}{i} \) \( 20,000 = \frac{500}{i} \) \( i = \frac{500}{20,000} = 0.025 \) (semi-annual rate) Annual rate \( = 0.025 \times 2 = 0.05 = 5\% \)
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