Perpetuity refers to a financial concept where a cash flow continues indefinitely without an end date. This means that an investor can expect to receive a fixed amount of money at regular intervals forever. Perpetuities are often used in valuing certain types of investments, such as bonds or real estate, where income is generated over an extended period. In finance, the present value of a perpetuity can be calculated using a simple formula. This formula takes into account the annual cash flow and the discount rate, which reflects the risk and time value of money. Understanding perpetuity is essential for investors looking to assess long-term financial opportunities.