PRC-2 · Chapter 3 · Question 37 of 45
What is the formula for the 'Sum to Infinity' (S∞) of a convergent GP?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) S∞ = a / (1 - r)
Explanation
This shortcut formula is extremely useful in finance for calculating the present value of perpetuities.
More Mathematical Progression MCQs
- Q39What is the common ratio (r) of the GP: 100, 50, 25...?
- Q40The sequence 5, 10, 20, 40... is an example of a/an:
- Q41In the GP formula for the sum of 'n' terms, if r > 1, the formula used is:
- Q42What is the sum of the first 5 terms of the GP: 3, 6, 12...?
- Q43The 'Arithmetic Mean' (AM) between two numbers 'x' and 'y' is defined as: