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Finance

 perpetuity
 present value of a perpetuity

 Calling Sequence perpetuity(cash, rate)

Parameters

 cash - amount of payments rate - interest rate

Description

 • The function perpetuity computes the present value of an instrument that pays the amount cash at the beginning of each period, forever, starting in one period.
 • An example of a perpetuity is a stock that pays the same dividends year after year.
 • Since perpetuity used to be part of the (now deprecated) finance package, for compatibility with older worksheets, this command can also be called using finance[perpetuity]. However, it is recommended that you use the superseding package name, Finance, instead: Finance[perpetuity].

Examples

Utility ABC pays a dividend of 1.5 units per share every year. Given a discount rate of 11%, what is the present value per share of those dividends?

 > $\mathrm{with}\left(\mathrm{Finance}\right):$
 > $\mathrm{perpetuity}\left(1.5,0.11\right)$
 ${13.63636364}$ (1)

Compatibility

 • The Finance[perpetuity] command was introduced in Maple 15.