Perpetuities (VCE SSCE General Mathematics): Flashcards

Investment providing regular payments indefinitely

Payments equal interest earned each period

Perpetuity maintains value forever; annuity exhausts funds

Like interest-only vs reducing balance loans

$D = \frac{r}{100 \times p} \times V_0$

Regular payment per compounding period

Number of compounding periods per year

Remains constant

$R = 1 + \frac{r}{100 \times p}$

Interest rate, compounding frequency, initial investment