PV of Growing Perpetuity

The Present Value of Growing Perpetuity calculator computes cash flow associated with growth in perpetuity based on the initial cash flow (C), a discount rate (r) and a growth rate (g).

INSTRUCTIONS: Choose the preferred currency units and enter the following:

• (C) This is the initial cash flow in period one.
• (r) This is the discount rate.
• (g) This is the growth rate.

PV of Growing Perpetuity:  The cash flow is returned in U.S. dollars.  However, this can be automatically converted to other currency units (e.g. Euros or Yuan).

The Math / Science

The Present Value of Growing Perpetuity is a cash flow that is expected to grow at a constant rate forever. A growing perpetuity and a growing annuity have similar features, but since the growing perpetuity lasts forever it puts a constraint on the growth rate.

Input Variables:

C- Cash Flow

r- Discount Rate

g- Growth Rate

Output for Formula:

Returns the Present Value of Growing Perpetuity