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Growing Perpetuity Present Value Calculator

Value a constant-growth series of future payments.

  • Formula & worked example
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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Edit a calculated value to solve backwards, or lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

A next-period payment of 1,000, a discount rate of 5% and growth of 3% give a present value of 50,000. The discount rate must exceed the growth rate.

Present value = next-period payment ÷ (discount rate − growth rate)

Worked example

Enter these known values and leave the other values blank.

Dividend
1000 USD
Discount rate
5 %
Growth rate
3 %
Present value
50000 USD

Assumptions and limitations

  • Enter the payment one period from now, with growth and discount rates for that same period. It assumes an indefinitely continuing series, constant rates and a discount rate greater than growth. Zero growth gives a level perpetuity.
  • Use consistent periods, currency and accounting definitions. The result follows the stated formula and the figures you supply.

Common questions

Which payment belongs in the formula?

Enter the payment one period from now, with growth and discount rates for that same period. It assumes an indefinitely continuing series, constant rates and a discount rate greater than growth. Zero growth gives a level perpetuity.

References

The calculation equations, inverse formulas, units, and input rules were imported from this source. Bookify provides the interface and equation solver.

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