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 n is the number of annuities received.
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 n = 1, the CRF reduces to 1+i. As n goes to infinity, the CRF goes to i.
Famous quotes containing the words capital, recovery and/or factor:
“It is a capital blunder; as you discover, when another man recites his charities.”
—Ralph Waldo Emerson (1803–1882)
“Walking, and leaping, and praising God.”
—Bible: New Testament Acts, 3:8.
Referring to the miraculous recovery of a lame man, through the intervention of Peter.
“Children of the middle years do not do their learning unaffected by attendant feelings of interest, boredom, success, failure, chagrin, joy, humiliation, pleasure, distress and delight. They are whole children responding in a total way, and what they feel is a constant factor that can be constructive or destructive in any learning situation.”
—Dorothy H. Cohen (20th century)