perpetuity.level: Level Perpetuity

In FinancialMath: Financial Mathematics for Actuaries

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

perpetuity.arith

perpetuity.geo

annuity.arith

annuity.geo

annuity.level

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 documentation built on May 1, 2019, 11:16 p.m.