Capital recovery factor

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A capital recovery factor is the ratio of a constant annuity to the present value of receiving that annuity for a given length of time. Using an interest rate i, the capital recovery factor is:

where is the number of annuities received.[1]

This is related to the annuity formula, which gives the present value in terms of the annuity, the interest rate, and the number of annuities.

If , the reduces to . As , the .

References[edit]

  1. ^ Calculator by Jenkins at University of California Archived July 8, 2006, at the Wayback Machine.

External links[edit]

Wolfram|Alpha Capital Recovery Factor Calculator