Difference between revisions of "Perpetuity"

Revision as of 18:39, 27 August 2020

Perpetuity

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-A perpetuity is a constant stream of identical cash flows with no end.  The formula for determining the [[Present Value|Present Value]] of a perpetuity is as follows:
+Perpetuity
-<math>PV</math> <math>=</math> <math>\frac{C_1}{(1+r)^1} +  \frac{C_2}{(1+r)^2} +  \frac{C_3}{(1+r)^3} + ... = \frac {C}{r}</math>
-Source: http://www.investopedia.com/terms/p/perpetuity.asp
-In [[Principles of Corporate Finance|Principles of Corporate Finance]] the perpetuity is defined as an [[Annuity|Annuity]] in which the periodic payments begin on a fixed date and continue indefinitely.
 [[Category:finance]]