What is Perpetuity?
Let's understand Perpetuity.
A perpetuity is an annuity with no termination date, i.e., n goes to infinity
An example that resembles perpetuity is the dividends of preferred stock.
To calculate the present value of a perpetuity, we have,
When the first payment is made immediately, we have,
Written by: Kalpesh Agrawal (Jr. Actuarial Officer)
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