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Financial Forensics · End Term · 21 Dec 2025 · September 2025 term

Question 32: A real estate developer offers an investment plan where …

Question 32

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A real estate developer offers an investment plan where buyers pay ₹15,00,000 upfront to own a property. The developer promises to pay ₹1,20,000 annually to the buyer for 20 years as rental income. However, some buyers propose an alternative: instead of a fixed rent, the annual rent should increase by 5% every year indefinitely. If the developer's cost of capital is 8%, what should be the rent in the first year of the new scheme so that it is financially equivalent to the original fixed-income plan?

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Correct answer: 35345 (accepted within ±5)

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Question 32 of 40 in the IIT Madras BS Financial Forensics (Financial Forensics) End Term paper sat on 21 Dec 2025, in the September 2025 term (Financial Forensics 18 Dec 25). It carries 1 mark.

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