# Perpetuity

A perpetuity is an **infinite** stream of cash flows of **identical magnitude** and **equal spacing in time**.

E.g., Perpetuities, consol bonds

![](/files/-M5-0YSId8Yh7B6Txy7b)PV of Perpetuity = $$\frac{CF}{R}$$

Again, this formula assumes that the first cash flow occurs at t=1.

## Simple Example

```
How much do you have to save now to be able to withdraw $100 at the end of each year, forever, 
if you earn 5% per annum?
```

PV = $$\frac{100}{0.05}$$ = $2000


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://vikram-bajaj.gitbook.io/introduction-to-corporate-finance-coursera/main-2/time-value-of-money/perpetuity.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.