Cash Value of Eternal Rente Post Numerando

Eternal Rente is rente whose sum of unlimited installments. The value of the eternal rent is a geometric progression down, so the value of the eternal rent of cash has value.

Cash Value Formula of Eternal Rente Post Numerando

Keterangan :
CV = Cash value
C = Initial capital period
i = percentage of interest per period

Example Question of Cash Value of Eternal Rente Post Numerando

Every final year x foundation will get donations from the World Bank for $3,500,000 for an indefinite period. If the World Bank will make a donation at a rate of 17.5%/year. Please determine the total donation received by the x foundation!

Answer:
C = $3,500,000
i = 17.5%/year = 0.175/year

So the total donation received by the x foundation is $20,000,000.

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