Perpetuity means without end. In finance, a perpetuity is a flow of money that will be received on a regular basis without a specified ending date. The concept of perpetuity is used to calculate the present value of an annuity. The formula for this is:PV = C/r PV is equal to the present value C= the amount of the cash flow, usually expressed in an annual amount r = the rate, or discount rate. For instance, an annuity that pays the owner $1000 in perpetuity can be valued. If the current discount rate is 5% then the present value of annuity is $20,000. $1,000/5% = $20,000. The concept of perpetuity is a basic concept used in the dividend discount pricing model for securities as well as real estate valuation. The British security called the consol is an example of a security that continues to pay interest in perpetuity. The consol is not dated and has a fixed coupon interest rate. It trades in the open market and its price fluctuates as interest rates change.