Present Worth for Initial Replacement Calculator

✖Replacement costs refer to the estimated expenses or expenditures required to replace an existing asset or item with a new one of similar functionality, condition, and capacity.ⓘ Replacement Cost [C_R]			+10% -10%
✖Interest Rate per Period represents the rate at which interest is charged or earned within a specific time frame.ⓘ Interest Rate per Period [i_r]			+10% -10%
✖The number of interest periods, often denoted as n, represents the total count of compounding periods within a specified time frame for an investment or loan.ⓘ Number of Interest Periods [n]			+10% -10%

✖Present Worth is a financial metric that represents the current value of a series of future cash flows, considering the time value of money.ⓘ Present Worth for Initial Replacement [P_worth]

⎘ Copy

👎

Formula

✖

Present Worth for Initial Replacement

Formula

`"P"_{"worth"} = ("C"_{"R"}/((1+"i"_{"r"})^("n")-1))`

Example

`"566343"=("70000"/((1+"0.06")^("2")-1))`

Calculator

LaTeX

Reset

👍

Download Chemical Engineering Formula PDF PDF Image

Present Worth for Initial Replacement Solution

STEP 0: Pre-Calculation Summary

Formula Used

Present Worth = (Replacement Cost/((1+Interest Rate per Period)^(Number of Interest Periods)-1))
P_worth = (C_R/((1+i_r)^(n)-1))
This formula uses 4 Variables

Variables Used

Present Worth - Present Worth is a financial metric that represents the current value of a series of future cash flows, considering the time value of money.
Replacement Cost - Replacement costs refer to the estimated expenses or expenditures required to replace an existing asset or item with a new one of similar functionality, condition, and capacity.
Interest Rate per Period - Interest Rate per Period represents the rate at which interest is charged or earned within a specific time frame.
Number of Interest Periods - The number of interest periods, often denoted as n, represents the total count of compounding periods within a specified time frame for an investment or loan.

STEP 1: Convert Input(s) to Base Unit

Replacement Cost: 70000 --> No Conversion Required
Interest Rate per Period: 0.06 --> No Conversion Required
Number of Interest Periods: 2 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

P_worth = (C_R/((1+i_r)^(n)-1)) --> (70000/((1+0.06)^(2)-1))

Evaluating ... ...

P_worth = 566343.042071197

STEP 3: Convert Result to Output's Unit

566343.042071197 --> No Conversion Required

FINAL ANSWER

566343.042071197 ≈ 566343 <-- Present Worth

(Calculation completed in 00.004 seconds)

You are here -

Home » Engineering » Chemical Engineering » Plant Design and Economics » Interest and Investment Costs » Present Worth for Initial Replacement

Credits

Created by Heet

Thadomal Shahani Engineering College (Tsec), Mumbai

Heet has created this Calculator and 200+ more calculators!

Verified by Prerana Bakli

University of Hawaiʻi at Mānoa (UH Manoa), Hawaii, USA

Prerana Bakli has verified this Calculator and 1600+ more calculators!

< 9 Interest and Investment Costs Calculators

Present Worth of Annuity

Go Present Worth of an Annuity = Annuity*(((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)/(Discrete Compound Interest Rate*(1+Discrete Compound Interest Rate)^(Number of Interest Periods)))

Present Worth with Salvage Value of Equipment at 2nd Year Investment

Go Present Worth = Purchase Cost of Equipment-(Annuity)/(1+Interest Rate per Period)-(Annuity)/(1+Interest Rate per Period)^(2)+Salvage Value of Equipment

Future Worth of Perpetuity

Go Future Worth of a Perpetuity = Annuity*(((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)/((Discrete Compound Interest Rate)))

Future Worth of Annuity

Go Future Worth of an Annuity = Annuity*(((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)/(Discrete Compound Interest Rate))

Capitalized Cost

Go Capitalized Cost = Original Cost of Equipment+(Replacement Cost/((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1))

Future Worth of Annuity given Present Annuity

Go Future Worth of an Annuity = Present Worth of an Annuity*((1+Discrete Compound Interest Rate)^(Number of Interest Periods))

Present Worth for Initial Replacement

Go Present Worth = (Replacement Cost/((1+Interest Rate per Period)^(Number of Interest Periods)-1))

Replacement Cost

Go Replacement Cost = Original Cost of Equipment-Salvage Value of Equipment

Present Worth of Perpetuity

Go Present Worth of a Perpetuity = Annuity/Discrete Compound Interest Rate

Present Worth for Initial Replacement Formula

Present Worth = (Replacement Cost/((1+Interest Rate per Period)^(Number of Interest Periods)-1))
P_worth = (C_R/((1+i_r)^(n)-1))

What is Investment Cost?

Investment cost refers to the total expenses incurred to acquire, develop, and maintain an asset, project, or business initiative. It encompasses a wide range of expenditures associated with the purchase, construction, improvement, or expansion of tangible and intangible assets. Investment costs are a critical consideration in financial planning and decision-making processes for individuals, businesses, and organizations.

How to Calculate Present Worth for Initial Replacement?

Present Worth for Initial Replacement calculator uses Present Worth = (Replacement Cost/((1+Interest Rate per Period)^(Number of Interest Periods)-1)) to calculate the Present Worth, Present Worth for Initial Replacement is a financial metric used to evaluate the economic feasibility of replacing an existing asset with a new one. Present Worth is denoted by P_worth symbol.

How to calculate Present Worth for Initial Replacement using this online calculator? To use this online calculator for Present Worth for Initial Replacement, enter Replacement Cost (C_R), Interest Rate per Period (i_r) & Number of Interest Periods (n) and hit the calculate button. Here is how the Present Worth for Initial Replacement calculation can be explained with given input values -> 566343 = (70000/((1+0.06)^(2)-1)).

FAQ

What is Present Worth for Initial Replacement?

Present Worth for Initial Replacement is a financial metric used to evaluate the economic feasibility of replacing an existing asset with a new one and is represented as P_worth = (C_R/((1+i_r)^(n)-1)) or Present Worth = (Replacement Cost/((1+Interest Rate per Period)^(Number of Interest Periods)-1)). Replacement costs refer to the estimated expenses or expenditures required to replace an existing asset or item with a new one of similar functionality, condition, and capacity, Interest Rate per Period represents the rate at which interest is charged or earned within a specific time frame & The number of interest periods, often denoted as n, represents the total count of compounding periods within a specified time frame for an investment or loan.

How to calculate Present Worth for Initial Replacement?

Present Worth for Initial Replacement is a financial metric used to evaluate the economic feasibility of replacing an existing asset with a new one is calculated using Present Worth = (Replacement Cost/((1+Interest Rate per Period)^(Number of Interest Periods)-1)). To calculate Present Worth for Initial Replacement, you need Replacement Cost (C_R), Interest Rate per Period (i_r) & Number of Interest Periods (n). With our tool, you need to enter the respective value for Replacement Cost, Interest Rate per Period & Number of Interest Periods and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

How many ways are there to calculate Present Worth?

In this formula, Present Worth uses Replacement Cost, Interest Rate per Period & Number of Interest Periods. We can use 1 other way(s) to calculate the same, which is/are as follows -

Present Worth = Purchase Cost of Equipment-(Annuity)/(1+Interest Rate per Period)-(Annuity)/(1+Interest Rate per Period)^(2)+Salvage Value of Equipment

Home

FREE PDFs

🔍 Search