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How do you calculate perpetuity in Excel? |



The perpetuity function is used to calculate an infinite sequence of cash flows, where each future value equals the previous one plus a factor.
It can also be found in financial accounting software such as QuickBooks and Xero.

The “perpetuity formula” is a mathematical equation that can be used to calculate the value of perpetuity. The equation is as follows:

How do you calculate perpetuity in Excel? |

Example of the Present Value of a Perpetuity Formula

If a payment of 4,000 is received every period for the rest of time and the discount rate is 5%, the present value of a perpetuity formula gives the following value of the payments today: PV = Pmt / I PV = 4,000 / 5% PV = 80,000.00 PV = PV = PV = PV = PV = PV = PV = PV = PV = PV = PV = PV = PV = PV = PV = PV = PV

After that, one could wonder, “What is the formula for perpetuity?”

In general, a perpetuity’s present value is equal to the cash flow of the perpetuity at the end of period 1, C, divided by the periodic discount rate, r. The PV of a perpetuity (= C r) signifies that the first payment will be made one period from now.

What is the NPV formula, in addition to the above? The Net Present Value (NPV) formula is a method of determining the Net Present Value (NPV) of a sequence of cash flows using a discount rate. When estimating the value of an investment, the NPV formula may be particularly helpful in financial analysis and financial modeling (a company, a project, a cost-saving initiative, etc.).

Furthermore, what is PV of infinity?

Perpetuity’s Present Value Perpetuity is a kind of perpetual annuity that consists of a succession of equal infinite cash flows that occur at the conclusion of each period with an equal time gap between them. The monthly cash flow divided by the interest rate equals the present value of a perpetual.

What is the formula for calculating present value?

Formula for Present Value PV = Present value is the worth of a payment on a specific date, also known as present discounted value. r = the discounting rate, often known as the periodic rate of return, interest, or inflation rate.

Answers to Related Questions

What is the meaning of a discounted rate?

The rate of return used to discount future cash flows back to their present value is called a discount rate.

What is the difference between an annuity and a perpetual annuity?

The ending term is the sole difference between annuity and perpetuity. Payments for annuity are made for a certain length of time, but payments for perpetuity are made forever, as shown by (). To determine the present value of perpetuity, use the equation below. Only the initial payment and the interest rate are required.

In Excel, how do you compute the IRR of a perpetuity?

The IRR is the rate of return or discount rate at which the net present value (NPV) is zero. The PV of perpetuity is simply C/r, where C represents the same cash flow year after year and r represents the discount rate. When we compare the PV to the original investment, the NPV becomes zero, and the r is referred to as the IRR. I hope this information is useful.

What is the formula for calculating a perpetual bond?

Perpetual Bond Value Calculation

The set interest payment, or coupon amount, divided by the discount rate determines the price of a perpetual bond, with the discount rate indicating the rate at which money loses value over time.

What is a good example of infinity?

Although a perpetuity is purely theoretical (can something really endure forever? ), corporations, real estate, and certain kinds of bonds are typical examples. The UK’s government bond, known as a Consol, is an example of a perpetuity.

What is a perpetuity and how does it work?

A perpetual annuity is a form of annuity that lasts indefinitely. For an endless length of time, the stream of cash flows continues. The perpetuity calculation is a valuation methodology used in finance to determine the present value of a company’s cash flows when discounted back at a given rate.

What is the rate of growth in perpetuity?

Perpetuity growth rates are typically between 2 and 3 percent higher than historical inflation and 4 to 5 percent higher than historical GDP growth. If the perpetual growth rate surpasses 5%, it is considered that the company’s predicted growth would always outstrip that of the economy.

What is the formula for annuities?

The periodic payment on an annuity is calculated using the annuity payment formula. An annuity is a series of payments that are made on a regular basis and are received at a later date. The first payment is the present value element of the calculation; an example is the initial payout on an amortized loan.

How does a perpetuity’s principle amount be repaid?

The principle of a perpetual that is repaid in one big payment. Divide the Payment amount by the Interest rate to get the value of a perpetuity. A perpetuity is an unending sequence of identical financial flows that never ends. Returns are earned in the form of a series of cash flows in a perpetuity.

What exactly is PMT?

Payment is abbreviated as PMT. The payment function on a financial calculator is used to compute the payment for a loan with continuous installments and a constant interest rate. On the spreadsheet, enter an interest rate, the number of installments, and the loan amount.

What is the PV equation, and how does it work?

The present value (PV) formula is a financial formula that determines the present value of an item received at a later period. The calculation is based on the concept of “time worth of money.”

What is the meaning of the term “present value”?

Given a certain rate of return, present value (PV) is the current value of a future amount of money or stream of cash flows. The discount rate determines the present value of future cash flows, and the greater the discount rate, the lower the current value of future cash flows.

What exactly is YTM stand for?

The yield to maturity (YTM) of a bond is the total return expected if the bond is kept to maturity. Long-term bond yields are referred to as yield to maturity, however they are represented as an annual rate.

What is the worth of future cash flows in terms of their present value?

Accounting’s present value of future cash flows

The present value of future cash flows should be used as a measure of fair value if no comparable market prices exist. The present value of future cash flows is a means of comparing the value of cash that you anticipate to receive in the future to the current value.

What is an example of net present value (NPV)?

For example, if a security has a net present value (NPV) of $50,000 and an investor pays precisely $50,000 for it, the investor’s net present value (NPV) is For example, if a security offers a series of cash flows with an NPV of $50,000 and an investor pays exactly $50,000 for it, then the investor’s NPV is $0. The Internal Rate of Return is the discount rate which sets the Net Present Value of all future cash flow of an investment to zero.. The Internal Rate of Return (IRR) is a discount rate that reduces the Net Present Value of an investment’s future cash flows to zero.

At what discount rate does the net present value (NPV) equal zero?

When the discount rate is between 15% and 20%, the net present value (NPV) is zero.

What NPV rate do you use?

It is the expected rate of return for investors or the cost of borrowing money. The corporation will compute NPV using a discount rate of 12% if shareholders anticipate a return of 12%. If a company pays 4% interest on its debt, that value may be used as the discount rate.

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Personal Finance

Instant Money Transfers: How to Speed Up Your Financial Transactions?




People today are no longer limited to using traditional banking methods and payment options like cash or checks for their financial transactions. With digital payment options becoming increasingly popular, money transfers have become easier. However, while these solutions offer convenience, they only sometimes guarantee a speedy transaction of funds from one party to another. If you need an instant transfer solution that allows you to move your funds without any hassles quickly, keep reading. Here are some tips to help you get started with an instant money transfer:

Find a Trustworthy Money Transfer Provider

Finding a trustworthy money transfer provider is paramount in ensuring your money’s safe and efficient transfer. Start by researching different providers, particularly their reputation, customer reviews, and transaction security protocols. The team at Paysend can help you send money to the Philippines from the USA in just a matter of seconds. A reliable provider should have a robust security framework to guard against fraud and hacking attempts. Additionally, consider the speed of their service, the fees they charge, and the exchange rates they offer.

Some providers may offer attractive transfer rates but compensate with hidden charges, so read the fine print. Customer service is another important factor; a good provider will have a responsive and knowledgeable support team to promptly address any issues or concerns. Regulatory compliance is also crucial – ensure the appropriate financial authorities regulate the provider. Remember, a trustworthy provider prioritizes the security and satisfaction of its customers above all else.

Select Your Preferred Payment Method

Choosing your preferred payment method is a critical step in instant money transfers. Several payment methods are available, and the best choice often depends on one’s circumstances and preferences. The most common payment options include bank transfers, debit or credit cards, and digital wallets. Bank transfers, while reliable, may provide a different speed than some users require. Debit or credit card payments are typically faster but may carry higher fees.

Digital wallets like PayPal or Apple Pay offer speed and convenience, allowing you to transfer funds digitally without requiring bank account information. The factor to consider here is not just the convenience of the payment method but also its transaction speed, security, and associated charges. Always select a payment method that suits your needs regarding these factors.

Sign Up for an Account

Once you have selected the ideal payment method and provider, it is time to sign up for an account. Most providers will require personal information such as your name, address, email ID, and phone number, so make sure the details you provided are accurate. You might also be asked to supply additional documents, such as identification proof and bank statements, to verify your identity.

Sometimes, you may need to link your bank account with the transfer provider’s platform; read through their documentation carefully to understand what steps you need to take. Once the registration process is complete, you can access and use the money transfer service for quick transfers.

Initiate the Money Transfer

Most providers will require you to register on their platform with valid ID documents before proceeding. Enter all the necessary details correctly and accurately, including recipient information and account numbers. Additionally, make sure that you double-check the amount of money being transferred and the associated fees.


Confirm everything is correct before hitting ‘Send’ to avoid costly mistakes or delays in transfer processing. You should receive an email or text message confirming the transfer with your transaction details, including the recipient’s account information and a tracking number. You can use this tracking number to monitor the progress of your money transfer.

Complete the Money Transfer Process

This usually requires providing basic information such as the recipient’s name, address, and contact details. Depending on your provider, you may also need to specify what currency you’re sending and offer additional security authentication. Once this is done, enter the amount you wish to transfer, verify the transaction details, and approve it. After that, your money should be on its way to the recipient’s account immediately.

Some providers offer extra features such as tracking services or reminders for upcoming transfers for added security and convenience. These features can come in handy when sending payments regularly or tracking the status of a transaction. Additionally, look out for any special offers, discounts, or rewards available to loyal customers. Many money transfer providers offer these incentives as a way of showing appreciation and encouraging loyalty among their customers.

Monitor the Status of Your Transfer

Most providers will allow you to monitor the progress of your transfer in real time. Some may even send notifications via email or text message when the money reaches its destination. If you sense any delays, contact customer support for assistance. Money transfers can take a few minutes to several hours, depending on the selected payment method and recipient country.


Finally, always save all records related to your money transfers, including emails and receipts. If there are any discrepancies or disputes, you can refer to these documents for clarification. With the help of a reliable provider and modern payment methods like digital wallets, you can now easily make instant money transfers. So get started today and experience the convenience of instant money transfer services.

Receive and Verify the Transaction

Once the money has been transferred, you or the recipient should receive a notification of completion. At this point, ensuring the transaction was successful, and all details were correct is important. For security purposes, some providers may ask for additional verification from either party to avoid fraud and other malicious activities. This process could include providing a digital signature or proof of identity.

Once the verification is complete, the funds should be available in the recipient’s account almost immediately. If you have any concerns, contact customer support to get assistance or help resolve any issues. Remember that reliable providers prioritize customer satisfaction and security above all else. With these steps, you can now easily and safely transfer money with instant money transfer services.

Nowadays, it’s more important than ever to employ secure digital payment methods in your daily financial transactions. That’s why researching which providers offer the best services regarding speed, security, transaction fees, and customer support pays off. With the right provider, you can have peace of mind knowing that your money transfers will be conducted instantaneously and securely.

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Personal Finance

The Ins and Outs of Getting a Loan With Bad Credit




If financial difficulties or uninformed decisions have left you with bad credit, you may not know where to turn for a loan. While borrowing money with a low credit score may take additional research or work, it’s likely still within your reach.  

Many lenders offer bad credit loans for people who need extra cash but may not have the best credit background. Applying for a loan with bad credit may feel intimidating, but the following considerations could make the process easier.

Start by Checking Your Credit

Before you begin shopping for loans, check your credit report. Some creditors require specific scores for each loan product, even those designed for bad credit, so knowing your score saves you time.

It’s also important to check your credit report for errors that may drag your score down and limit your loan options. You can access this information from Equifax and TransUnion for free online.

Compare Your Options

While a lower credit score likely disqualifies you from some personal loans, you may still have many options. Some lenders offer loans specifically for people with low credit scores who struggle to qualify for other options.


Bad credit loans may require a deposit or other fees, have higher interest rates than other loans, or include income requirements. However, they may also offer a wide range of payment terms and options like online portals that make managing your loan easier. With some research, you could find the right fit for your circumstances.  

Whenever possible, take advantage of loan prequalification. Many lenders allow you to check your potential eligibility for a loan by providing personal and financial information. They use that to run a soft credit check, which doesn’t affect your credit score. If you pre-qualify, they’ll provide information about possible rates and terms. You could complete prequalification forms for multiple loans to help you find your best option.

Improve Your Application

Some financial decisions improve your loan eligibility. A friend or family member with better credit may agree to co-sign your loan. In that case, their financial information influences your eligibility for a loan.

Cosigners take on substantial risk. If you fail to repay your loan, your cosigner becomes responsible. Likewise, issues with the loan could hurt their credit score and put a strain on your interpersonal relationship.  


If multiple lenders have declined your applications for unsecured loans, consider a secured loan instead. Secured loans require collateral, like a deposit, car, or other property. If borrowers don’t repay their loans, lenders may seize the collateral. Lending institutions don’t take on as much risk with secured loans as unsecured loans so they may have more lenient credit requirements for borrowers.

Avoid Scams

Unfortunately, fraudulent lenders often exploit consumers who have limited loan options. Before providing a lender with any personal or financial information, ensure they’re legitimate. Otherwise, you risk having your identity stolen or paying fees for a loan you never receive.

Be wary of anyone offering guaranteed approval or soliciting your business via cold calls. Always verify loan servicers’ contact information and check their reviews on trusted third-party websites.

The Bottom Line

If you have bad credit, you could still qualify for a personal loan. Remember to check your credit score, investigate your options, and confirm a lender’s legitimacy before applying. If you still struggle to qualify, you may need a cosigner or collateral to boost your application.

By taking some extra steps, you can make getting a loan easier and safer.

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Personal Finance

Four Ways to Save on Fuel in 2023





From increasing energy bills to price hikes at online stores and supermarkets, all individuals globally feel the need to make their money to go further and do more. And there has never been a perfect time to know how to save more on fuel than now.

From getting fuel cards with great deals and driving more efficiently to using telematics and keeping your vehicle in good condition, here are different ways to save money on fuel.

Get a Fuel Card

A fuel card can provide you with more than the ability to purchase fuel from a good station. With a fuel card, you can control your business’s fuel spend by getting discounts on fuel pump rates, setting spending limitations, and increasing your cash flow – all enabling you to save a significant amount of money.

Fuel cards allow savings on fuel, which means that the price you pay is always less compared to the one indicated on the fuel pump machine. With numerous fuel cards available out there, find the right partner with excellent deals.

Use Telematics/Advanced Route Planning

Digital telematics solutions come with real-time GPS tracking as well as remote automobile diagnostics helping individuals and company owners to thoughtfully plan the most efficient routes depending on different data points. A high-quality telematics solution also integrates with route optimisation systems to plan the most efficient routes and offer turn-by-turn directions and navigations.


Well-planned routes allow automobiles to get from point C to D efficiently, significantly minimising time spent and distance covered, saving on fuel. Heavy-duty automobiles can avoid routes with steep hills. You can also re-plan a hilly route for a light and medium-duty automobile.

But as you do that, ensure the route you choose doesn’t take your drivers too far. Side-step all congested routes and those that require excessive stopping and starting or cause unnecessary idling.

Drive More Efficiently

One of the proven ways to save on fuel is to manage driver behavior. Whether you’re a driver or fleet manager, you need to keep yourself or drivers accountable for how they utilize their fuel cards.

You should also reinforce ways to conserve fuel through safety training – many of the behaviors that are taught as techniques of safe driving, such as driving more efficiently. Most businesses and individuals use telematics to control driver behavior, such as harsh accelerating or braking, to maximize return on investment by minimizing fuel spend.

Keep Your Vehicle in Good Condition

If you keep your automobile in excellent condition by servicing it in line with the guidelines of the manufacturer, it’ll help you save on fuel costs. Fix any faults quickly to make sure your vehicle is operating efficiently.


When you keep your car in excellent condition, you’ll enjoy numerous benefits, saving fuel being one of them. A vehicle that isn’t serviced based on the guidelines of the manufacturer can increase the consumption of fuel by approximately 50%.

Integrate these four ways into your automobile’s daily activities, and you’ll be able to save on fuel.

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