Enter the initial cost ($), the maintenance cost ($), and the interest rate (%) into the Capitalized Cost Calculator. The calculator will evaluate and display the Capitalized Cost.

## Capitalized Cost Formula

The following formula is used to calculate the Capitalized Cost.

CC = IC + MC*(1/(R/100))
• Where CC is the Capitalized Cost ($) • IC is the initial cost ($)
• MC is the maintenance cost ($) • R is the interest rate (%) To calculate a capitalized cost, multiply the maintenance cost by 1 over the interest rate, then add the result to the initial cost. ## How to Calculate Capitalized Cost? The following example problems outline how to calculate Capitalized Cost. Example Problem #1 1. First, determine the initial cost ($). The initial cost ($) is given as 200,000 . 2. Next, determine the maintenance cost ($). The maintenance cost ($) is calculated as 40,000 . 3. Next, determine the interest rate (%). The interest rate (%) is found to be 15. 4. Finally, calculate the Capitalized Cost using the formula above: CC = IC + MC*(1/(R/100)) Inserting the values from above yields: CC = 200000 + 40000*(1/(15/100)) = ($) 466,666.66

Example Problem #2

The variables needed for this problem are provided below:

initial cost ($) = 4000 maintenance cost ($) = 2000

interest rate (%) = 10

Entering these values and solving gives:

CC = IC + MC*(1/(R/100)) = (\$) 24,000