FinancialMath (version 0.1.1)

perpetuity.level: Level Perpetuity

Description

Solves for the present value, interest rate, or the amount of the payments for a level perpetuity.

Usage

perpetuity.level(pv=NA,pmt=NA,i=NA,ic=1,pf=1,imm=TRUE)

Arguments

pv

present value

pmt

value of level payments

i

nominal interest rate convertible ic times per year

ic

interest conversion frequency per year

pf

the payment frequency- number of payments per year

imm

option for perpetuity immediate or annuity due, default is immediate (TRUE)

Value

Details

Effective Rate of Interest: $eff.i=(1+\frac{i}{ic})^{ic}-1$

$j=(1+eff.i)^{\frac{1}{pf}}-1$

Perpetuity Immediate:

$pv=pmt*{a_{\left. {\overline {\, \infty \,}}\! \right |j}}=\frac{pmt}{j}$

Perpetuity Due:

$pv=pmt*{\ddot {a}_{\left. {\overline {\, \infty \,}}\! \right |j}}=\frac{pmt}{j}*(1+i)$

See Also

perpetuity.arith

perpetuity.geo

annuity.arith

annuity.geo

annuity.level

Examples

perpetuity.level(pv=100,pmt=NA,i=.05,ic=1,pf=2,imm=TRUE)

perpetuity.level(pv=100,pmt=NA,i=.05,ic=1,pf=2,imm=FALSE)