Asked by Kaur
Find the present value of a perpetuity of rs 18,000 payable at the end of 6 months, if the money is worth 8% p.a. compounded semi-annually.
Answers
Answered by
oobleck
just plug your numbers into the usual PV formula.
Also, I don't see where you have mentioned the discount rate.
Also, I don't see where you have mentioned the discount rate.
Answered by
Kaur
@oobleck
8% p.a. compounded semi-annually is discounted rate
8% p.a. compounded semi-annually is discounted rate
Answered by
mathhelper
You just want the amount of money which will generate 18,000
at 4% each half year,
that is simply
PV(.04) = 18,000
PV = 450,000
that is, 4% of 450,000 = 18,000, pay it out as a scholarship or whatever,
gets you back to 450,000, another half year ---> 18,000 "perpetually" etc
at 4% each half year,
that is simply
PV(.04) = 18,000
PV = 450,000
that is, 4% of 450,000 = 18,000, pay it out as a scholarship or whatever,
gets you back to 450,000, another half year ---> 18,000 "perpetually" etc
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