1.3. Perpetuities and Annuities

Question 1

Perpetuity | Definition

Answer 1

Infinite Stream of Cash flows, paid at regular intervals forever

Question 2

Annuity | Definition

Answer 2

finite stream of N cash flows, paid at regular intervals

Question 3

Growing Perpetuity

Answer 3

infinite stream of cash flows, growing at a constant rate of g, paid at regular intervals forever

Question 4

Growing Annuity

Answer 4

finite stream of cash flows, growing at a constant rate of g, paid at regular intervals