Perpetuity Calculator
Values a payment stream with no end date, such as a preference share or an endowment.
Present value
—
Share sends a link that reopens these numbers. Copy details pastes the full breakdown as a list.
Payment as % of value — %
Reading this —
The formula
PV = payment ÷ (r − g)
Far-off payments shrink so much when discounted that the infinite sum has a finite total, as long as growth stays below the discount rate.
What to watch out for
The answer is very sensitive to the gap between the two rates, so small changes move it a lot.
Frequently Asked Questions
What is the formula for a perpetuity?
Payment divided by the discount rate. 1,000 a year at 5% is worth 20,000.
What is a growing perpetuity?
A payment that rises at a steady rate. With 2% growth, the same example is worth 33,333.