Present Value of Perpetuity
Previous Lesson: Special Application of Time Value of Money
Next Lesson: Effective Interest Rate
Ordinary annuities whose payments or receipts are continue forever is called perpetuity. Formula for present value of perptutiy is describe below:
Example 1:
Mr. Karim wishes to find out investments which return Rs. 10,000 forever, discounted at 10 percent?
Further Readings
References
Financial Management: Theory and Practice, Dr Eugene F Brigham & C Micheal Ehrhardt
Fundamentals of Financial Management: Concise Edition, Brigham Houston
The Economist Guide to Financial Management, John Tennet
Financial Management: Core Concepts, Raymond M Brooks
0 Comments