A promise of money in the future is worth less than getting this money now. Present value (PV) here would be - how much you would pay now to get $X after T time.
Turns out that sum of PV($X in 1 year) + PV($X in 2 years) + … converges even though the series is infinite. Look up “perpetual bonds”.
The value of $10 paid annually forever is probably $200-500 depending on [things].
Source: I work in a bank but I’m also shit at finance so take this with a large grain of salt.
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A promise of money in the future is worth less than getting this money now. Present value (PV) here would be - how much you would pay now to get $X after T time.
Turns out that sum of PV($X in 1 year) + PV($X in 2 years) + … converges even though the series is infinite. Look up “perpetual bonds”.
The value of $10 paid annually forever is probably $200-500 depending on [things].
Source: I work in a bank but I’m also shit at finance so take this with a large grain of salt.