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Perpetuity Types and Formulas Explained by Arya Wisanggeni is a document available to read on EtoBox.

There are two types of perpetuities: level and growing. A level perpetuity provides constant payments over time, while a growing perpetuity increases payments at a constant rate. The present value of a level perpetuity that pays $500 annually at an 8% discount rate is $6,250. The present value of a growing perpetuity that pays $500 in the first year, increases by 4% annually, and is discounted at 8% is $12,500.

Author

Arya Wisanggeni

Language

EN