The present value of a perpetuity is ₹50,000 when the payment of ₹1,000 is made at the end of each period. Find the present value of the perpetuity if - Mathematics MCQ Mathematics Mock Test - 11 2026 | ExamTest.live

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The present value of a perpetuity is ₹50, 000 when the payment of ₹1, 000 is made at the end of each period. Find the present value of the perpetuity if the payments are made at the beginning of each period.

Solution & Step-by-step Explanation

Case 1: Payment at the end of each period (Perpetuity Immediate).Formula: P = \frac{R}{i} 50, 000 = \frac{1 , 000}{i} ⟹ i = \frac{1 , 000}{50 , 000} = 0.02 .Case 2: Payment at the beginning of each period (Perpetuity Due).Formula: P_{due} = R + \frac{R}{i} P_{due} = 1, 000 + 50, 000 = 51, 000 .Thus, the present value is ₹51, 000 .

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The present value of a perpetuity is ₹50, 000 when the payment of ₹1, 000 is made at the end of each period. Find the present value of the perpetuity if the payments are made at the beginning of each period.

₹50, 000

₹51, 000

Information not sufficient

₹49, 000

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