An Account On Perpetuities

Tips to calculate Perpetuities, PerpetuitiesDo you want to know about the procedure of calculating perpetuities? Well then you need to read this article very minutely. First of all you should know the formula of calculating it. The formula is $R/I%. Here the quantity of interest that is paid in every period is considered as R and I denote the rate of interest in each period. Then you should define the variables accordingly.

After the calculation you can interpret the results in words in order to get the complete understanding of your calculation of perpetuities. Perpetuity is basically an annuity that has no specific end so to speak and only a number of specific type of investments work as perpetuities and preferred stock and real estate’s are among that. Perpetuities are the time worth of money and in most of the cases they are normal annuities and these are really close to the terminal values also.

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