# Present Value of a Perpetuity Calculator

## What does it do?

This present value of a perpetuity calculator works out the value today of an infinite stream of identical cash flows (Pmt) made at regular intervals over time, using a discount rate of i%.

## Formula

The calculator uses the present value of a perpetuity formula as shown below:

`PV = Pmt / i`

Further details about the formula can be found at our present value of a perpetuity formula page.

## Instructions

The Excel present value of a perpetuity calculator, available for download below, is used to compute the present value by entering details relating to the regular payment, and the discount rate. The calculator is used as follows: ### Step 1

Enter the regular payment amount (Pmt). The regular payment is the identical cash flow made each period for an infinite amount of time.

### Step 2

Enter the discount rate (i). The discount rate is the rate used to discount each payment amount back from the end of the period in which is was made, to the beginning of period 1 (today). The rate should be for a period, so for example, if the period is a year, then the rate should be the yearly rate.

### Step 3

The present value of a perpetuity calculator works out the present value (PV). The answer is the value today (beginning of period 1) of an infinite stream of identical cash flows (Pmt) made at regular intervals over time, using a discount rate of i%. It is the present value of a perpetuity.