Perpetuity
Perpetuity is a financial term that refers to a stream of payments that continues indefinitely. It is a type of annuity that has no end date and is usually used to refer to a bond or other financial instrument that pays a fixed amount of money at regular intervals. The payments are usually made at the same time each year and are not affected by inflation or other economic factors. Perpetuities are often used to provide a steady income stream for investors and can be used to fund retirement plans or other long-term investments.
History of Perpetuity
The concept of perpetuity has been around since ancient times, with the earliest known example being the Roman Empire’s “perpetual annuity” which was used to fund public works projects. The term was first used in the modern financial sense in the 18th century by British economist David Ricardo, who used it to describe a type of bond that paid a fixed amount of money at regular intervals. Since then, the concept of perpetuity has been used in a variety of financial instruments, including bonds, stocks, and other investments.
Comparison Table
| Type of Investment | Payment Frequency | Payment Amount |
|---|---|---|
| Perpetuity | Annual | Fixed |
| Annuity | Varies | Varies |
| Bond | Varies | Varies |
| Stock | Varies | Varies |
Summary
Perpetuity is a financial term that refers to a stream of payments that continues indefinitely. It is a type of annuity that has no end date and is usually used to refer to a bond or other financial instrument that pays a fixed amount of money at regular intervals. Perpetuities are often used to provide a steady income stream for investors and can be used to fund retirement plans or other long-term investments. For more information about this term, you can visit websites such as Investopedia, The Balance, and Investing.com.
See Also
- Annuity
- Bond
- Stock
- Yield
- Interest Rate
- Dividend
- Capital Gain
- Cash Flow
- Inflation
- Risk
