I am interested in learning about the formula for perpetual investment. I want to understand how to calculate returns on investments that continue indefinitely, possibly with some sort of compounding effect. What is the mathematical expression or formula that represents this concept?
5
answers
OpalSolitude
Fri Mar 14 2025
In this equation, C represents the cash flow or the amount of money that is expected to be received in the future.
Silvia
Fri Mar 14 2025
The variable r stands for the interest rate or the yield that an investor could earn by investing in an alternative asset with similar risk characteristics.
DaeguDiva
Fri Mar 14 2025
On the other hand, g represents the growth rate, which is the expected rate at which the cash flow will increase over time.
IncheonBeautyBloom
Fri Mar 14 2025
The formula PV equals C divided by the difference between r and g is a fundamental concept in finance.
CryptoVisionary
Fri Mar 14 2025
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