Cash Value of Eternal Rente Pranumerando

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 Pranumerando

Information :
CV = Cash value
C = Initial capital period
i = Percentage of interest per period

Example Question of Cash Value of Eternal Rente Pranumerando

At the beginning of each month, Fulan will earn a $175,000 scholarship from PT UNILEVER for a limited period of time. PT UNILEVER does not want to bother. Therefore, the scholarship will be awarded at the same time but subject to interest of 1%/month. Determine the total scholarship Fulan received!

Answer:
C = $175,000
i = 1%/month = 0.01/month

So the total scholarship received by Fulan is $17,675,000.00.

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