What is Perpetuity Payment?
A perpetuity payment is a concept often encountered in finance and investment scenarios. It refers to a series of equal cash flows that are paid out at regular intervals and continue indefinitely into the future. The defining characteristic of perpetuity payments is their perpetual nature, meaning there is no specified end date for the cash flows. This makes them distinct from other financial instruments or investments that have a finite duration. In practical terms, perpetuity payments can represent various financial arrangements. For instance, a perpetuity payment could be a dividend payment made by a company to its shareholders at regular intervals, with the expectation that these payments will continue indefinitely. Similarly, certain types of bonds or securities may also involve perpetuity payments, where the issuer commits to paying a fixed amount of interest regularly without a maturity date.
How to Calculate Perpetuity Payment?
Perpetuity Payment calculator uses Perpetuity Payment = Present Value*Rate per Period to calculate the Perpetuity Payment, The Perpetuity Payment is a fixed sum of money paid at regular intervals indefinitely. Perpetuity Payment is denoted by PMTperpetuity symbol.
How to calculate Perpetuity Payment using this online calculator? To use this online calculator for Perpetuity Payment, enter Present Value (PV) & Rate per Period (r) and hit the calculate button. Here is how the Perpetuity Payment calculation can be explained with given input values -> 5 = 100*0.05.