Perpetuity Present Value Calculator

About this calculator

A perpetuity is a stream of equal payments that continues forever, and its present value has one of the simplest formulas in finance: PV = Payment / Discount Rate. Because payments stretch infinitely into the future, the formula collapses the entire endless stream into a single number today, discounted by the rate of return an investor requires. The concept traces back to instruments like the UK's historical consols (perpetual government bonds) and is still used to value preferred stock, endowment funds, and any cash flow assumed to continue indefinitely at a constant level.

This calculator takes the periodic payment amount and the discount rate and returns the present value of that infinite payment stream. It's a useful building block for finance students and analysts modeling terminal value in a discounted cash flow analysis, where a company's cash flows beyond a forecast period are often approximated as a perpetuity.