Anmol gets a rent of Rs 100 each month for the next infinite years. Assuming rate at 12%. Find the present value.

To calculate the present value of an infinite series of future payments (also known as a perpetuity), we can use the formula:

PV = PMT / r

where:

• PV is the present value we want to find,
• PMT is the amount of each payment, and
• r is the interest rate per period.

In this case, Anmol receives Rs 100 each month, so PMT = 100. The interest rate is 12% per year, but since the payments are monthly, we need to convert this to a monthly rate. There are 12 months in a year, so the monthly rate is 12% / 12 = 1% = 0.01 in decimal form. So, r = 0.01.

Substituting these values into the formula, we get:

PV = 100 / 0.01 = Rs 10,000

So, the present value of the rent payments is Rs 10,000.