How it works
Present value = next-period cash flow / (discount rate − growth rate). Discount rate must exceed growth.
Input definitions
- Next-period cash flow
- Enter the value in the labeled unit.
- Discount rate (%)
- Enter the value in the labeled unit.
- Growth rate (%)
- Enter the value in the labeled unit.
A worked example
- Next-period cash flow
- 1000
- Discount rate (%)
- 8
- Growth rate (%)
- 3
Assumptions & limits
Planning model using the rates, cash flows and periods entered. Examples are illustrative, not market quotes or personalised financial advice. Taxes, inflation and transaction costs are excluded unless explicitly entered.
Sources & review
Maintained by AnsRio. Methods and examples use automated checks; this does not imply independent professional certification.
Method updated 2026-10-18. Content checked against the stated method and examples. Our verification approach.
Common questions
Which cash flow should I enter?
Use the next-period payment, not the last payment already received. Constant perpetual growth is a strong modelling assumption.
How does Growing perpetuity present value work?
Present value = next-period cash flow / (discount rate − growth rate). Discount rate must exceed growth.
What should I check before using Growing perpetuity present value?
Planning model using the rates, cash flows and periods entered. Examples are illustrative, not market quotes or personalised financial advice. Taxes, inflation and transaction costs are excluded unless explicitly entered.