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Capital Recovery Factors Formula and Calculator

Engineering Applications

Capital Recovery Factors Formula and Calculator

The future equal payments to repay a present value of money is determined by the capital recovery factor, which is the reciprocal of the present worth factor for a series of equal payments.

Life-cycle cost is calculated by determining the present worth of the cost of an investment. For system alternatives, it is

Where:

where
i = interest rate / 100
n = lifetime in years

Table 1.0: Annual Capital Recovery Factors

Years	Rate of Return or Interest Rate, % per Year
	3.5	4.5	6	8	10
2	0.52640	0.53400	0.54544	0.56077	0.57619
4	0.27225	0.27874	0.28859	0.30192	0.31547
6	0.18767	0.19388	0.20336	0.21632	0.22961
8	0.14548	0.15161	0.16104	0.17401	0.18744
10	0.12024	0.12638	0.13587	0.14903	0.16275
12	0.10348	0.10967	0.11928	0.13270	0.14676
14	0.09157	0.09782	0.10758	0.12130	0.13575
16	0.08268	0.08902	0.09895	0.11298	0.12782
18	0.07582	0.08224	0.09236	0.10670	0.12193

Figure 1.0 Capital Recovery Factor Versus Time

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Derived from resources provided by:

ASHRAE Pocket Guide for HVAC, 2013