There are formulas for the present value of a perpetuity (aka: no-growth perpetuity) and the present value of an ordinary annuity (aka: finite series of cash flows):

(I)

(II)

With CF > 0 and 0 converges to as n approaches . Create a numerical example to show that this is so and explain the relevance of this convergence with respect to the estimation of financial asset valuation.

CA PV =