• Kalpesh Agrawal

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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