What Is a Perpetuity?
A perpetuity is a series of payments that keeps going with no end date (OpenStax).
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1.What is a perpetuity?
A perpetuity is a series of payments that keeps going with no end date (OpenStax).
2.Why is money later worth less than money today?
To compare, you shrink each future payment back to today, which is called discounting.
3.At 5 percent, what is a payment of 100 next year worth today?
100 divided by 1.05 is about 95.24; two years out it is about 90.70 and three years out about 86.38 (worked example).
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