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perpetuity.level

Level Perpetuity


Description

Solves for the present value, interest rate, or the amount of the payments for a level perpetuity.

Usage

perpetuity.level(pv=NA,pmt=NA,i=NA,ic=1,pf=1,imm=TRUE)

Arguments

pv

present value

pmt

value of level payments

i

nominal interest rate convertible ic times per year

ic

interest conversion frequency per year

pf

the payment frequency- number of payments per year

imm

option for perpetuity immediate or annuity due, default is immediate (TRUE)

Details

Effective Rate of Interest: eff.i=(1+\frac{i}{ic})^{ic}-1

j=(1+eff.i)^{\frac{1}{pf}}-1

Perpetuity Immediate:

pv=pmt*{a_{≤ft. {\overline {\, ∞ \,}}\! \right |j}}=\frac{pmt}{j}

Perpetuity Due:

pv=pmt*{\ddot {a}_{≤ft. {\overline {\, ∞ \,}}\! \right |j}}=\frac{pmt}{j}*(1+i)

Value

Returns a matrix of the input variables and calculated unknown variables.

Note

One of pv, pmt, or i must be NA (unknown).

Author(s)

Kameron Penn and Jack Schmidt

See Also

Examples

perpetuity.level(pv=100,pmt=NA,i=.05,ic=1,pf=2,imm=TRUE)

perpetuity.level(pv=100,pmt=NA,i=.05,ic=1,pf=2,imm=FALSE)

FinancialMath

Financial Mathematics for Actuaries

v0.1.1
GPL-2
Authors
Kameron Penn [aut, cre], Jack Schmidt [aut]
Initial release

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