Please ensure Javascript is enabled for purposes of website accessibility
Search
Accessibility Menu

How to Calculate the Interest Rates on Perpetuity

By Motley Fool Staff – Oct 4, 2025 at 10:14PM

Key Points

  • Perpetuities pay a fixed annual sum; interest rate calculated by dividing payment by price.
  • Example: $5,000 annual perpetuity for $60,000 has an 8.33% interest rate.
  • Validate investment value using Present Value formula, confirming fair price.
Key findings are powered by ChatGPT and based solely off the content from this article. Findings are reviewed by our editorial team. The author and editors take ultimate responsibility for the content.

Our Guides

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.