MHB Present value of a perpetual annuity

[mathmari]

Hey!

I want to determine the present value of a perpetual annuity, which will incur an interest payment of € 1 at the end of each year.

A calculative interest rate $r$ is assumed.

We are at the time $t = 0$, the first payout is in $t = 1$. Could you explain to me what an interest payment exactly and what a calculative interest rate is? (Wondering)

 

[mathmari]

Let $K$ be the initial capital.
Since the calculative interest rate is $r$ we have that after the first year the present value of a perpetual annuity will be $K+Kr$.
We want that the interest payment at the end of each year is $1$, so the amount of money that we add to the initial capital at the end of each year is $1$ euro, i.e., $Kr=1$.

Is this correct? (Wondering)

Or have I misunderstood the meanings? (Wondering)