A perpetuity pays ₹3,000 a year. By how much does its present value fall if the rate rises from 5% to 6% a year?

Explanation

1. 01

   At 5%: $\frac{3{,}000}{0.05} = 60{,}000$. At 6%: $\frac{3{,}000}{0.06} = 50{,}000$.

2. 02

   It falls by $60{,}000 - 50{,}000 = 10{,}000$ rupees.