Insert the information in the form and the calculator will determine the capital recovery factor.

What is the capital recovery factor?

The capital recovery factor is the ratio of a constant annuity to the present value of receiving that annuity for a specific period of time.

How to calculate capital recovery factor?

To calculate capital recovery factor you should use the following formula:
capital recovery factor = (i (1+i)^n) / ((1+i)^n - 1)
where:
i = real discount rate
n = number of years

example: given that the real discount rate (i) is 8% and the number of years (n) is 4 years, calculate the capital recovery factor?

Using the capital recovery factor formula the asnwer will be:

capital recovery factor = (i (1+i)^n) / ((1+i)^n - 1)
capital recovery factor = (0.08 (1+0.08)^4) / ((1+0.08)^4 - 1)
capital recovery factor = 0.3019

Why use capital recovery factor?

Companies and investors use the capital recovery factor in order to determine how successful their investments are.