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Present Worth of Perpetuity Formula

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Present Worth of a Perpetuity is a financial metric that represents the current value of an infinite series of equal cash flows where the cash flows continue indefinitely into the future. Check FAQs

P P = \frac{A}{i}

P_P - Present Worth of a Perpetuity?A - Annuity?i - Discrete Compound Interest Rate?

Present Worth of Perpetuity Example

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Here is how the Present Worth of Perpetuity equation looks like with Values.

Here is how the Present Worth of Perpetuity equation looks like with Units.

Here is how the Present Worth of Perpetuity equation looks like.

20000 = \frac{1000}{0.05}

20000 = \frac{1000}{0.05}

20000 = \frac{1000}{0.05}

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Present Worth of Perpetuity Solution

Follow our step by step solution on how to calculate Present Worth of Perpetuity?

FIRST Step Consider the formula

P P = \frac{A}{i}

Next Step Substitute values of Variables

∴

P P = \frac{1000}{0.05}

Next Step Prepare to Evaluate

∴

P P = \frac{1000}{0.05}

LAST Step Evaluate

∴

P P = 20000

Present Worth of Perpetuity Formula Elements

Variables

Present Worth of a Perpetuity

Present Worth of a Perpetuity is a financial metric that represents the current value of an infinite series of equal cash flows where the cash flows continue indefinitely into the future.

Symbol: P_P

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Present Worth of a Perpetuity

Annuity

Annuity is a financial product or arrangement that involves a series of periodic payments or receipts made at equal intervals.

Symbol: A

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Annuity

Discrete Compound Interest Rate

Discrete Compound Interest Rate rate refers to the interest that is calculated and compounded at specific, discrete intervals during a given period, rather than continuously.

Symbol: i

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Discrete Compound Interest Rate

Other formulas in Interest and Investment Costs category

Go Capitalized Cost

K = V + (\frac{C R}{{(1 + i)}^{n} - 1})

Go Future Worth of Annuity

F = A \cdot (\frac{{(1 + i)}^{n} - 1}{i})

Go Future Worth of Annuity given Present Annuity

F = P \cdot ({(1 + i)}^{n})

Go Future Worth of Perpetuity

F P = A \cdot (\frac{{(1 + i)}^{n} - 1}{(i)})

How to Evaluate Present Worth of Perpetuity?

Present Worth of Perpetuity evaluator uses Present Worth of a Perpetuity = Annuity/Discrete Compound Interest Rate to evaluate the Present Worth of a Perpetuity, The Present Worth of Perpetuity is a financial metric that represents the current value of an infinite series of equal cash flows or payments received or paid at regular intervals, where the cash flows continue indefinitely into the future. Present Worth of a Perpetuity is denoted by P_P symbol.

How to evaluate Present Worth of Perpetuity using this online evaluator? To use this online evaluator for Present Worth of Perpetuity, enter Annuity (A) & Discrete Compound Interest Rate (i) and hit the calculate button.

FAQs on Present Worth of Perpetuity

What is the formula to find Present Worth of Perpetuity?

The formula of Present Worth of Perpetuity is expressed as Present Worth of a Perpetuity = Annuity/Discrete Compound Interest Rate. Here is an example- 20000 = 1000/0.05.

How to calculate Present Worth of Perpetuity?

With Annuity (A) & Discrete Compound Interest Rate (i) we can find Present Worth of Perpetuity using the formula - Present Worth of a Perpetuity = Annuity/Discrete Compound Interest Rate.

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Present Worth of Perpetuity Formula

Present Worth of Perpetuity Example

Present Worth of Perpetuity Solution

Present Worth of Perpetuity Formula Elements

Other formulas in Interest and Investment Costs category

How to Evaluate Present Worth of Perpetuity?

FAQs on Present Worth of Perpetuity

Variable Name