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Perpetuity Value Calculator

Value an infinite series of equal payments with a single discount rate.

How it is calculated

A perpetuity pays the same amount forever, and its value today is PV = C / r. C is the payment per period and r is the discount rate for the same period, entered as a percent (the tool divides by 100). The rate must be above zero; at zero or below the sum would be infinite or meaningless, so no result is shown. The formula assumes the first payment arrives one full period from now. If the first payment is made today, add one payment to the result. There is no growth in this tool. The answer depends strongly on the chosen rate: halving the rate doubles the value.

Worked example

An asset pays 500 per year forever and the discount rate is 5%. Convert the rate: 5 / 100 = 0.05. Value = 500 / 0.05 = $10,000.00. At a 4% rate the value would rise to 12,500, and at 10% it would fall to 5,000.

Try this example →

Common mistakes

  • Using a monthly payment with an annual rate, or the other way around; both must cover the same period.
  • Typing 0.05 for 5%, which divides again by 100 and makes the value 100 times too high.
  • Entering a rate of zero and expecting a number; the value would be infinite.
  • Forgetting that the formula starts with a payment one period from now, not today.
  • Using the plain formula for payments that grow every year, which needs a growth term this tool does not have.

About this calculator

This calculator finds the present value of a perpetuity — a stream of equal payments that continues forever — using the simple formula PV = C / r, where C is the periodic payment and r is the discount rate per period. Because payments stretch to infinity, the formula collapses into this one division instead of summing an endless series.

Finance students use it to understand the building block behind dividend discount and bond valuation models, and analysts use the same logic (often a growing-perpetuity variant) to value assets like preferred stock or a business's terminal value in a discounted cash flow model.

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