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26) If a person bought a house by paying 4500000 down payment and 80000 at the end of each year till the perpetuity assuming the rate of interest as 16%, the present value of house is given as a) 47,00,000 b) 45,00,000 c) 57,80,000 d) 50,00,000?
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26) If a person bought a house by paying 4500000 down payment and 8000...
Solution:

Given,

Down payment = ₹4,500,000

Annual payment = ₹80,000

Interest rate = 16%

We need to find the present value of the house.

Let us first calculate the present value of the annual payment.

PV of perpetuity = Annual payment / Interest rate

PV of perpetuity = ₹80,000 / 0.16

PV of perpetuity = ₹500,000

Now, let us calculate the present value of the total payments.

PV of total payments = Down payment + PV of perpetuity

PV of total payments = ₹4,500,000 + ₹500,000

PV of total payments = ₹5,000,000

Therefore, the present value of the house is ₹5,000,000.

Option (d) 50,00,000 is the correct answer.

Note: The present value of a perpetuity formula is PV = C / r, where C is the annual payment and r is the interest rate. The present value of a perpetuity calculates the value of receiving a fixed amount of money every year, with no end date, at a certain interest rate.
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26) If a person bought a house by paying 4500000 down payment and 8000...
Option D
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26) If a person bought a house by paying 4500000 down payment and 80000 at the end of each year till the perpetuity assuming the rate of interest as 16%, the present value of house is given as a) 47,00,000 b) 45,00,000 c) 57,80,000 d) 50,00,000?
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26) If a person bought a house by paying 4500000 down payment and 80000 at the end of each year till the perpetuity assuming the rate of interest as 16%, the present value of house is given as a) 47,00,000 b) 45,00,000 c) 57,80,000 d) 50,00,000? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about 26) If a person bought a house by paying 4500000 down payment and 80000 at the end of each year till the perpetuity assuming the rate of interest as 16%, the present value of house is given as a) 47,00,000 b) 45,00,000 c) 57,80,000 d) 50,00,000? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 26) If a person bought a house by paying 4500000 down payment and 80000 at the end of each year till the perpetuity assuming the rate of interest as 16%, the present value of house is given as a) 47,00,000 b) 45,00,000 c) 57,80,000 d) 50,00,000?.
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