Question 12
MediumOriginal questionA family sets up a trust to pay a scholarship of ₹15,000 at the end of every year, for ever. Money earns 6% a year.
If the trust paid the first scholarship today and then every year after, how much would it need today?
Show the answer and explanation
CorrectNot quiteAnswer C
Correct answer: C
Explanation
Today's payment is made at once; the rest is an ordinary perpetuity.
rupees.
Worth noting
₹2,35,000 subtracts the first payment; it must be added, since it is paid now.
- Concept
- A perpetuity paid in advance
- Typical timeTypical
- 120 s
- Your timeYours
- —
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