Knowee
Questions
Features
Study Tools

Anmol gets a rent of Rs 100 each month for the next infinite years. Assuming rate at 12%. Find the present value.833.33338.88838.38383.33None of the above.

Question

Anmol gets a rent of Rs 100 each month for the next infinite years. Assuming rate at 12%. Find the present value.833.33338.88838.38383.33None of the above.

🧐 Not the exact question you are looking for?Go ask a question

Solution

The present value of a perpetuity formula is used to calculate the present value of a series of cash flows that continue indefinitely. The formula for the present value of a perpetuity is cash flows per period divided by the interest rate.

In this case, the cash flow per period is Rs 100 and the interest rate is 12% or 0.12 in decimal form.

So, the present value (PV) is calculated as follows:

PV = Cash flow per period / Interest rate PV = Rs 100 / 0.12 PV = Rs 833.33

So, the present value of the rent Anmol gets each month for the next infinite years, assuming a rate of 12%, is Rs 833.33. Therefore, the answer is 833.33.

This problem has been solved

Similar Questions

Payment=Rs.100/- in the end of every yearRate=12% and interest is charged every half yearlyTime=2 years Find the amount at the end of two years?Options :431.01437.46424.64411.12

Samar leased a car worth Rs 1,547,000 with a down payment of 50%. If the rate of simple interest onthe remaining amount is 7% per annum for a period of 2 years, find thea. total interest Samar pays in 2 years. (2 Marks)b. total cost of the car.

. Mr. R. K. Nair gets Rs. 6455 at the end of one year at the rate of 14% per annum in a recurringdeposit account. Find the monthly installment.

A sum invested on simple interest  grows to Rs 22500/- and Rs 25500/- is seven and  nine years respectively. What is the rate percentage of the interest ?Question 4Answera.7.5b.9.6c.12.5d.13.5

orWatch a videoRhianna puts $1,000.00 into an account to use for school expenses. The account earns 5% interest, compounded annually. How much will be in the account after 10 years?Use the formula A=P1+rnnt, where A is the balance (final amount), P is the principal (starting amount), r is the interest rate expressed as a decimal, n is the number of times per year that the interest is compounded, and t is the time in years.Round your answer to the nearest cent.

1/3

Upgrade your grade with Knowee

Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.