Understand the meaning of perpetuity with our bite-sized video lesson! Learn how to use its formula and see examples, followed by an optional quiz for practice.

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Learn what perpetuity is in finance. Understand the meaning and definition of perpetuity, its characteristics and how its present value can be found using a formula.

A perpetuity refers to a stream of identical and equally-spaced cash flows that are assumed to continue forever. The present value (PV) of a perpetuity is the sum of discounted values of indefinite cash flows.

Perpetuity: In finance, an equal amount of money expected to be paid or received each period is known as an annuity. An annuity that occurs forever is known as perpetuity. An annuity can either be an …

The annuities are also classified as perpetuity. In perpetuity, the cash flows are of the same value at received or paid regular time frame. Answer and Explanation: 1 1) Answer is A, B, and C The …

TRUE or FALSE: An increase in the interest rate (assuming positive interest rates) will always cause the present value of a perpetuity (with annual cash flows greater than 0) to decrease.

Perpetuity: Perpetuity refers to the perpetual cash flows or the cash flows to be received or paid indefinitely. It is a type of annuity which lasts forever. Only present value of the perpetuity is possible …

B) All else equal, the present value of a perpetuity is higher when the interest rate is lower. C) If two perpetuities have the same present value and the same interest rate, they must have the same cash …