After 2 days of struggle and help from Keith I figured out the solution. I just have to provide this direct path to set the persistent disk.
/opt/render/project/src
For example. if you have all you data in a folder called data in your root directory then your mount path of the Disk would be /opt/render/project/src/data
You can also find this path by accessing shell env and print the cwd from your data folder.
This is not very clear in the documentation and also no video in youtube can explain this and several questions in this community regarding setting up persistent disk hit dead end. Hope this helps.