1.

What is the capitalized value of a property fetching a net annual rent of Rs.1000 and the highest rate of interest prevalent being 5%, rate of interest is 8%?(a) Rs.16500.00(b) Rs.18500.00(c) Rs.12900.00(d) Rs.12500.00I had been asked this question in an online quiz.My question is taken from Values, Tax, Funds & Rents etc in division Valuation, Reports Technical and Design Data of Civil Engineering Drawing

Answer»

Correct answer is (d) Rs.12500.00

Explanation: For Rs.5.00 INTEREST, CAPITAL Rs.1000.00

To get Rs.1000.00 interest, capital = (100/5)*1000

= Rs.20000.00

In short capitalized value is – Net annual INCOME*Year’s purchase

For the same net income if the rate of interest is 8% the capitalized value = 1000*(100/8)= Rs.12500.00.



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