What is the value of a perpetuity


Problem 1. Present value of single sum problem

You are going to be given $100,000 in 12 years. Assuming an inflation rate of 3.5%, what is the present value of this amount?

Problem 2. Perpetuity problem

What is the value of a perpetuity with an annual payment of $100 and a discount rate of 6%?

Problem 3. Future value of single sum problem

You put $2,000 in an investment account today which will earn 8% over the next 14 years, what is the future value?

Problem 4. Present value of single sum problem

You are going to be given $45,000 in 7 years. Assuming an inflation rate of 2.5%, what is the present value of this amount?

Problem 5. Present value of annuity problem

You will receive $1,200 at the end of the next 15 years, assuming an 8% discount rate, what is the present value of the cash flows?

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Finance Basics: What is the value of a perpetuity
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