Cost Converted to Equal Yearly Amount
Use discount rate wey you choose convert purchase and recurring costs to equal yearly cost.
Your numbers
Equal cost for each year
Estimate for learning with your assumptions; no live rates, tax rules or investment recommendations. Returns fit dey negative and no get guarantee.
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Formula
Use EAC = [P−S/(1+r)^n]/a(r,n)+C. P na purchase cost, S na final resale value, C na yearly operating cost, r na yearly discount fraction, and n na years. a(r,n) na the sum of discount factors for each year end.
Use discount rate wey you choose convert purchase and recurring costs to equal yearly cost.
Example wey show the calculation
- First purchase cost
- 1000
- Cost to operate for one year
- 100
- Money from resale when useful life end
- 0
- Discount rate for one year (%)
- 0
- Years
- 5
- Equal cost for each year
- 300
Where e fit work and limits
Estimate for learning with your assumptions; no live rates, tax rules or investment recommendations. Returns fit dey negative and no get guarantee.
We check inputs for missing values and allowed ranges. Result wey pass the finite numeric range no go show. Rounding affect wetin display, while calculation use the model numeric precision.
Check your units and assumptions before you rely on result. Changing label no convert currency or physical unit.
Version of di formula: d1801589e622 · Example don get check: