Retirement
Perpetuity — the forever version
The limit as the horizon becomes infinite. It provides a lower bound: any finite-horizon payment must exceed pure interest income, because principal is being returned.
The Formula
PMT = PV x r
The limit as the horizon becomes infinite. It provides a lower bound: any finite-horizon payment must exceed pure interest income, because principal is being returned.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| PMT | Payment sustainable indefinitely | currency | $500,000 at 5% gives $25,000 a year forever in nominal terms if nothing is spent from principal. |
What Each Symbol Means
PMTcurrency
Payment sustainable indefinitely
$500,000 at 5% gives $25,000 a year forever in nominal terms if nothing is spent from principal.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate annuity payments page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Annuity Payments, filed under Finance. Every number the guide produces comes from substituting into this one line.