A perpetuity will pay $2 500 per year, starting five years after the perpetuity is purchased. What is the future value (FV)of this perpetuity, given that the interest rate is 5%?

Question

Quizplus · Accepted Answer

A perpetuity is a type of annuity that pays an infinite amount of periodic payments. Since it never ends, the future value of a perpetuity cannot be calculated as it would theoretically be infinite. The concept of future value applies to investments or financial instruments that have a definite end term, which is not the case with perpetuities.

A Perpetuity Will Pay $2 500 Per Year, Starting Five