A perpetual annuity, also called a perpetuity, promises to pay a certain amount of money to its owner forever. … The bulk of the value of a perpetuity comes from the payments that you receive in the near future, rather than those you might receive 100 or even 200 years from now.

What is a good example of a perpetuity?

It is sometimes referred to as a perpetual annuity. Fixed coupon payments on permanently invested (irredeemable) sums of money are prime examples of perpetuities. Scholarships paid perpetually from an endowment fit the definition of perpetuity.

What do you mean by perpetuity?

Perpetuity means something that continues indefinitely. In finance, this can refer to an annuity–rather, a cash flow–that continues on forever. As stated by Finance Formulas, a perpetuity is an annuity that is paid out in periodic payments for an infinite amount of time.