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:

present value of a perpetuity calculator v 1.0

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.

Present Value of a Perpetuity Calculator Download

The present value of a perpetuity calculator spreadsheet is available for download in Excel format by following the link below.

The present value of an perpetuity calculator is one type of tvm calculator used in time value of money calculations, discover another at the links below.

Notes and major health warnings
Users use this present value perpetuity calculator at their own risk. We make no warranty or representation as to its accuracy and we are covered by the terms of our legal disclaimer, which you are deemed to have read. This is an example of a present value of a perpetuity calculator that you might use when considering how to calculate the present value of perpetuity. It is purely illustrative of a present value of an perpetuity calculator. This is not intended to reflect general standards or targets for any particular business, company or sector. If you do spot a mistake in this perpetuity present value calculator, please let us know and we will try to fix it.
Last modified July 16th, 2019 by Michael Brown

About the Author

Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years in all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.

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