Perpetuity Calculator
Payment over rate with live valuation.
Calculator
Results
PV of Perpetuity
$16,666.67
Live results update as you type — currently showing pv of perpetuity of $16,666.67. Replace the defaults with your own numbers.
Visualizations
Perpetuity
Formula
Level payments forever.
Variables
| Symbol | Name | Unit | Description |
|---|---|---|---|
| PMT | Payment | $ | Per period |
Explanation
Value of forever payments.
Step-by-Step Calculation
Follow each step to understand how the result is calculated from your inputs.
PV = PMT / r
Worked Examples
See how the calculator works with different scenarios.
Scenario
The perpetuity calculator run on the values above.
Inputs
Calculation
1. PV = PMT / r → $16,666.67
Result
PV of Perpetuity: $16,666.67
Interpretation
$1,000.00 forever is worth $16,666.67 at 6.00%.
Understanding Your Result
Your Result: PV of Perpetuity: $16,666.67
What This Means
Value of forever payments.
Why It Matters
$1,000.00 forever is worth $16,666.67 at 6.00%.
Professional Interpretation
$1,000.00 forever is worth $16,666.67 at 6.00%.
How this is calculated
Level payments forever.
What drives the result
Compounding grows lump sums and streams forward; discounting shrinks them back. The rate is the exchange rate between today and tomorrow.
Recommendations
- •Consols and perpetual preferreds price here.
- •Doubling the rate halves the value.
Educational Content
Introduction
Money has a time price: a dollar today compounds forward and discounts backward. Annuities package that into streams, NPV/IRR judge projects, and DCF prices whole firms.
Concept Explanation
Compounding grows lump sums and streams forward; discounting shrinks them back. The rate is the exchange rate between today and tomorrow.
Applications
Benefits
- •Comparable across timing
- •Rate-explicit decisions
- •Value linked to cash, not accounting
Limitations
- •Constant-rate simplifications
- •Even-flow shortcuts where noted
- •Forecasts dominate DCF truth
Best Practices
- •Match rate frequency to cash frequency
- •Show ranges for DCF/IRR
- •Annualize before comparing
Common Misconceptions
Practical Tips
- •Halves when rate doubles.
Common Mistakes
Assumptions
This calculator makes the following assumptions to provide estimates:
Limitations
Be aware of these limitations when using this calculator:
Frequently Asked Questions
Answers to common questions about this calculator.
Examples?
How accurate is the perpetuity calculator?
Ordinary vs due?
Nominal vs effective?
Related Guides
Deepen your understanding with these educational resources.
Glossary
Technical terms used in mortgage calculations explained in plain language.
- Perpetuity
- Payments forever — PV is payment over rate.
Authoritative References
Trusted sources and standards referenced by this calculator.
Applicable Standards
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Page Information
2026-09-23
2.0.0
Free to use for educational and professional purposes.