Finance

Instant, private, and free

Perpetuity Calculator.

Calculate perpetuity present value from payment and discount rate.

On-device calculationNo signup

Set your values

Results update as you type.

02 / ANSWER

Periodic payment

Discount rate

Present value

$0.00

FAQs

How does the perpetuity calculator work?

Enter the requested values to receive a deterministic result. No live market, tax, or jurisdiction data is inferred.

Use Cases

Valuing preferred stocks

Preferred stocks often pay fixed dividends indefinitely. Use this calculator to estimate the present value of such dividend streams based on your required rate of return.

Example: A preferred stock paying $5 annually with a 6% discount rate has a present value of $83.33.

Evaluating perpetual bonds

Perpetual bonds (consols) pay interest forever. Determine their fair value by inputting the annual coupon payment and your required yield.

Example: A bond paying $80 yearly with a 4% yield is worth $2,000.

Frequently Asked Questions

What is a perpetuity?: A perpetuity is a series of equal cash flows that continue indefinitely. The present value is calculated by dividing the periodic payment by the discount rate.
How is the present value of a perpetuity calculated?: The present value is calculated by dividing the periodic payment by the discount rate (expressed as a decimal). For example, a $100 payment with a 5% discount rate gives a present value of $2,000.
What does the discount rate represent?: The discount rate is the rate of return required by an investor. It reflects the time value of money and risk. A higher discount rate reduces the present value of future payments.

Tips & Common Mistakes

Tips

Ensure the periodic payment and discount rate are in the same time period (e.g., annual payment with annual rate).
Convert the discount rate from percentage to decimal before dividing (e.g., 5% becomes 0.05).
Remember that the present value is inversely related to the discount rate: higher rates lower the value.
Use this calculator for quick estimates, but consider growth rates or taxes for more complex scenarios.

Common Mistakes to Avoid

Forgetting to convert the discount rate from percentage to decimal, leading to incorrect results.
Using a payment period that doesn't match the discount rate period (e.g., monthly payment with annual rate).
Assuming the perpetuity has a finite end; this calculator only works for level, infinite cash flows.

Last updated: August 13, 2026

Use Cases

Valuing preferred stocks

Preferred stocks often pay fixed dividends indefinitely. Use this calculator to estimate the present value of such dividend streams based on your required rate of return.

Example: A preferred stock paying $5 annually with a 6% discount rate has a present value of $83.33.

Evaluating perpetual bonds

Perpetual bonds (consols) pay interest forever. Determine their fair value by inputting the annual coupon payment and your required yield.

Example: A bond paying $80 yearly with a 4% yield is worth $2,000.

Frequently Asked Questions

What is a perpetuity?

A perpetuity is a series of equal cash flows that continue indefinitely. The present value is calculated by dividing the periodic payment by the discount rate.

How is the present value of a perpetuity calculated?

The present value is calculated by dividing the periodic payment by the discount rate (expressed as a decimal). For example, a $100 payment with a 5% discount rate gives a present value of $2,000.

What does the discount rate represent?

The discount rate is the rate of return required by an investor. It reflects the time value of money and risk. A higher discount rate reduces the present value of future payments.

Tips & Common Mistakes

Tips

Ensure the periodic payment and discount rate are in the same time period (e.g., annual payment with annual rate).
Convert the discount rate from percentage to decimal before dividing (e.g., 5% becomes 0.05).
Remember that the present value is inversely related to the discount rate: higher rates lower the value.
Use this calculator for quick estimates, but consider growth rates or taxes for more complex scenarios.

Common Mistakes to Avoid

Forgetting to convert the discount rate from percentage to decimal, leading to incorrect results.
Using a payment period that doesn't match the discount rate period (e.g., monthly payment with annual rate).
Assuming the perpetuity has a finite end; this calculator only works for level, infinite cash flows.

Finance

Instant, private, and free

Perpetuity Calculator.

Calculate perpetuity present value from payment and discount rate.

On-device calculationNo signup

Set your values

Results update as you type.

02 / ANSWER

Periodic payment

Discount rate

Present value

$0.00

FAQs

How does the perpetuity calculator work?

Enter the requested values to receive a deterministic result. No live market, tax, or jurisdiction data is inferred.

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Use Cases

Valuing preferred stocks

Preferred stocks often pay fixed dividends indefinitely. Use this calculator to estimate the present value of such dividend streams based on your required rate of return.

Example: A preferred stock paying $5 annually with a 6% discount rate has a present value of $83.33.

Evaluating perpetual bonds

Perpetual bonds (consols) pay interest forever. Determine their fair value by inputting the annual coupon payment and your required yield.

Example: A bond paying $80 yearly with a 4% yield is worth $2,000.

Frequently Asked Questions

What is a perpetuity?: A perpetuity is a series of equal cash flows that continue indefinitely. The present value is calculated by dividing the periodic payment by the discount rate.
How is the present value of a perpetuity calculated?: The present value is calculated by dividing the periodic payment by the discount rate (expressed as a decimal). For example, a $100 payment with a 5% discount rate gives a present value of $2,000.
What does the discount rate represent?: The discount rate is the rate of return required by an investor. It reflects the time value of money and risk. A higher discount rate reduces the present value of future payments.

Tips & Common Mistakes

Tips

Ensure the periodic payment and discount rate are in the same time period (e.g., annual payment with annual rate).
Convert the discount rate from percentage to decimal before dividing (e.g., 5% becomes 0.05).
Remember that the present value is inversely related to the discount rate: higher rates lower the value.
Use this calculator for quick estimates, but consider growth rates or taxes for more complex scenarios.

Common Mistakes to Avoid

Forgetting to convert the discount rate from percentage to decimal, leading to incorrect results.
Using a payment period that doesn't match the discount rate period (e.g., monthly payment with annual rate).
Assuming the perpetuity has a finite end; this calculator only works for level, infinite cash flows.

Last updated: August 13, 2026