# Newbie question on Net Present Value with Constant Growth

Newbie here, trying wrap my head around on why this doesn't add up:

Calculating the discounted cash flow of a perpetuity paying $1000 per year, 15% discount rate and 5% growth. If I calculate from the current year, it's $$1000/(15% - 5%) =$$10,000  However it's not the same number if I calculate from next year: $$1000 + ($$1000 * 1.05)/(15% - 5%)/1.15 =$10,130.43


Why is there an extra $130.43 ? • In the second formula you forgot to discount the first payment (which by assumption occurs 1 year from now). The correct calculation is$\frac{1000}{1.15}+\frac{1000*1.05}{(0.15-0.05)*(1.15)}= 10,000\$ – Alex C Jun 14 at 1:54