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tvm-fund

by io.finance-tools.tvm

calculate_perpetuity_value

Read-onlyIdempotent

Calculate the present value of a perpetuity: a constant (or constant-growth) cash flow received forever, discounted at a required rate. Formula: Perpetuity PV = CF / r; Growing perpetuity PV = CF / (r - g). WHEN TO USE: Use to value perpetual streams such as preferred dividends, ground rents, endowment-style income, or the terminal value component of a DCF (Gordon Growth Model). WHEN NOT TO USE: Do NOT use for finite cash-flow streams (use calculate_annuity_present_value or calculate_npv), and do NOT set growth_rate >= rate — the formula is undefined there (it implies an infinite value). BEHAVIOUR: pure deterministic calculation — no side effects, no network or storage access; idempotent and non-destructive; identical inputs always produce identical outputs. Division by zero, non-finite inputs, or mathematically undefined combinations return an explicit error instead of a number. RETURNS: JSON object { perpetuity_value: number (currency), inputs }. PARAMETERS: cash_flow (required): Periodic cash flow received forever, e.g. 30000. Must be > 0 for a normal perpetuity. rate (required): Required return / discount rate as a decimal, e.g. 0.08 = 8% (never pass percentage points). Must be strictly greater than growth_rate. growth_rate (optional): OPTIONAL perpetual growth rate of the cash flow as a decimal, e.g. 0.03 = 3% (never pass percentage points). Defaults to 0 (no growth). Must be strictly less than rate.

Input Schema

TableJSON Schema
NameRequiredDescriptionDefault
rateYesRequired return / discount rate as a decimal, e.g. 0.08 = 8% (never pass percentage points). Must be strictly greater than growth_rate.
cash_flowYesPeriodic cash flow received forever, e.g. 30000. Must be > 0 for a normal perpetuity.
growth_rateNoOPTIONAL perpetual growth rate of the cash flow as a decimal, e.g. 0.03 = 3% (never pass percentage points). Defaults to 0 (no growth). Must be strictly less than rate.

TDQS

A4.7/5.0
Behavior4/5

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Annotations already declare readOnlyHint, idempotentHint, and destructiveHint, and the description does not contradict them. It adds value beyond annotations by explicitly stating no side effects, no network/storage access, deterministic identical outputs, and detailed error behavior for division by zero or invalid inputs. It slightly repeats annotation content but still contributes meaningful operational context.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Conciseness5/5

Is the description appropriately sized, front-loaded, and free of redundancy?

Although lengthy, the description is tightly organized with labeled sections: formula, when to use, when not to use, behaviour, returns, and parameters. Each sentence carries load-bearing information, and the most critical constraints are front-loaded. There is no filler or repetition beyond what aids clarity.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Completeness5/5

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

There is no output schema, but the description explicitly states the return shape as a JSON object with perpetuity_value and inputs. All three parameters are fully documented with defaults, constraints, and examples. The tool is a pure calculation, so the description covers everything an agent needs to select and invoke it correctly.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Parameters4/5

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema coverage is 100%, so the schema already documents all parameters clearly. The description still adds useful nuance: it gives concrete value examples, clarifies the decimal-versus-percentage requirement in plain language, states the default for growth_rate, and reinforces the required relationship between rate and growth_rate. This goes beyond a bare schema dump.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Purpose5/5

Does the description clearly state what the tool does and how it differs from similar tools?

The description states a specific verb and resource: 'Calculate the present value of a perpetuity.' It precisely defines the object as a constant or constant-growth cash flow received forever, and provides both formulas. This is clearly distinguishable from sibling tools like calculate_annuity_present_value because it anchors on the perpetual, infinite-horizon nature of the cash flow.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Usage Guidelines5/5

Does the description explain when to use this tool, when not to, or what alternatives exist?

The description is exemplary: it has an explicit 'WHEN TO USE' section listing perpetual income contexts, and a 'WHEN NOT TO USE' section naming calculate_annuity_present_value and calculate_npv for finite cash-flow streams. It also warns specifically against setting growth_rate >= rate, which is a critical mathematical precondition. Nothing is left to inference.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.

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TDQS

A4.6/5.0
Disambiguation5/5

Each tool targets a mathematically distinct calculation (single-sum PV/FV, annuity, perpetuity, payback, fund multiples). The descriptions include explicit 'WHEN TO USE' and 'WHEN NOT TO USE' sections with cross-references, making it unambiguous which tool applies to which scenario.

Naming Consistency5/5

All tool names follow the exact pattern verb_noun with the consistent 'calculate_' prefix (e.g., calculate_present_value, calculate_payback_period). The naming convention is uniform across the entire set.

Tool Count5/5

11 tools is well within the ideal range for a focused domain. Each tool addresses a distinct calculation relevant to time-value-of-money and fund performance, with no redundant entries.

Completeness3/5

The set covers many core calculations but is missing NPV and IRR, which are explicitly referenced as the recommended tools in several descriptions (e.g., payback periods, TVPI). This creates a notable gap that could lead agents to follow cross-references to non-existent tools.

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