A scholarship of ₹4,000 a year is paid for ever, the first payment today. At 8% a year, what is its present value?

Explanation

1. 01

   Today's payment counts in full, ₹4,000; the rest is an ordinary perpetuity worth $\frac{4{,}000}{0.08} = 50{,}000$.

2. 02

   In all, $54{,}000$ rupees.