What this calculator does
Perpetuity value works out present value of a cash flow that continues forever, flat or growing. Enter your own figures above and the answer updates as you type: nothing is fixed in the code, so the result reflects exactly the numbers you supply.
The formula this calculator evaluates is printed under the tool and explained below, so you can check the working by hand or reuse it in a spreadsheet.
The formula
FormulaLevel: PV = C / r; Growing: PV = C / (r − g)
The inputs explained
| Field | What to enter |
|---|---|
| Cash flow next period ($) | A number, measured in your currency. Starts at 5000. |
| Discount rate (%) | A number, measured in %. Starts at 6. |
| Perpetual growth rate (%) | A number, measured in %. Starts at 2. |
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How the answer changes with cash flow next period
Every other input is held at the calculator’s starting values while cash flow next period varies. Select any row to load that scenario into the calculator.
How the answer changes with cash flow next period
| Cash flow next period ($) | Growing perpetuity value | Level (non-growing) perpetuity value | Value added by growth |
|---|---|---|---|
| 2,500 | $62,500.00 | $41,666.67 | $20,833.33 |
| 3,750 | $93,750.00 | $62,500.00 | $31,250.00 |
| 5,000 | $125,000.00 | $83,333.33 | $41,666.67 |
| 7,500 | $187,500.00 | $125,000.00 | $62,500.00 |
| 10,000 | $250,000.00 | $166,666.67 | $83,333.33 |
| 15,000 | $375,000.00 | $250,000.00 | $125,000.00 |