Capital Recovery Factor Calculator
Just enter an interest rate and number of years to instantly get the capital recovery factor. Add a principal to also see the annual payout (principal x factor), plus its relationship to the present value annuity factor (its reciprocal).
Input
%
yrs
$
Enter a principal to also calculate the annual payout (principal x factor).
Result
Capital recovery factor (rate 3%, 20 yrs)
0.067216
Capital recovery factor
0.067216
Present value annuity factor (reciprocal)
14.877475
Annual payout
$2,016,471.23
Drawing down $30,000,000.00 over 20 years while earning 3% lets you withdraw about $2,016,471.23 each year.
How it works
- The capital recovery factor is calculated as r(1+r)^n / ((1+r)^n - 1), where r is the interest rate as a decimal and n is the number of years. It is the multiplier for how much you can withdraw each year when drawing down a lump sum over n years.
- When the rate is 0%, the denominator of the formula would be zero, so it is handled specially as 1 / n (the same as simply dividing the principal into n equal parts).
- Enter a principal and the tool shows the annual payout as principal x capital recovery factor, expressed in currency.
- The reciprocal of the capital recovery factor is the present value annuity factor, which represents the present value of the right to receive one unit of currency each year for n years.
- Use it to estimate how much to draw down from savings over a fixed period after retirement, or the annualized cost of a capital investment spread over its useful life.
- Note: this is an estimate that assumes a constant rate of return. Actual payouts vary with investment performance, taxes, and inflation, so treat the result as a guide.
Reviews
Tell us what you think of this calculator.
Write a review
Found an incorrect result or a problem? Turn this on to report it.
- Home
Capital Recovery Factor Calculator